Summer Internship Report Pepsi

A Report Submitted towards the partial
fulfillment of the requirement of the one

month field project
MEGHA SHREE
BBA L1S2
ACKNOWLEDGEMENT
INSTITUTE OF MARKETING & MANAGEMENT
For the success of this project my profound

thanks and deep sense of gratitude is due, to
Mr.Soumitro Patnaik (ADC) for constantly
guiding me and tackling variety of hurdles with
implicit patience throughout my survey and
analysis. His deep involvement and interest in
the project infused in me great inspiration and
confidence in taking up this study in right
direction and without whose overall guidance
and help the project may not have been
completed.
The project report could not have been
completed without the guidance of Mr. Sharad
Vatts (MDM) & Mr. H. Kundu (Dy. General
Manager) of Pepsi, Varun Beverages Ltd.
Last but not the least my project work is a
result of guidance and co-operation of many
respectable persons of PEPSI and many of my
friends to whom I cannot express their help in
words.
In spite of all my efforts there can be some
short comings in my project work. Please point
out those mistakes and oblige.
UNDERTAKING
I Megha shree to the best of my knowledge
declare that the project on EDS (Every Dealer
Survey) & Supply Chain of Pepsi was
undertaken by me during FEBURY as my field
project The project was undertaken under the
supervision of Soumitro Patnaik (ADC) Varun
Beverages Ltd.
I declare that the project done for Pepsi,
Varun Beverages Ltd. is original.
TABLE OF CONTENTS
1. Title Page
2. Acknowledgement
3. Undertaking
4. Executive Summary----------------------------------------------------------------2
5. Objective of the Study-------------------------------------------------------------4
6. Methodology
6.1 The Research Frame---------------------------------------------------------5
6.2 Methodology for analysing supply chain----------------------------------6
7. Main Report
7.1 History of Pepsi---------------------------------------------------------------8
7.2 Pepsi Co Overview---------------------------------------------------------20
7.3 Pepsi Co India---------------------------------------------------------------22
7.4 About RKJ Group-----------------------------------------------------------24
7.5 Carbonated Soft Drink Industry------------------------------------------29
7.6 Marketing Mix---------------------------------------------------------------33
7.7 Operational Structure------------------------------------------------------36
7.8 Activities of the Sales Man-------------------------------------------------37
7.9 Introduction to SCM--------------------------------------------------------40
7.10 Supply Chain of Pepsi Co------------------------------------------------43
7.11 Research Design-----------------------------------------------------------49

7.12 The Sampling Design Process-------------------------------------------51
7.13 SWOT Analysis------------------------------------------------------------71
8. Findings---------------------------------------------------------------------------72
9. Conclusion & Recommendations
9.1 Conclusion-------------------------------------------------------------------73
9.2 Recommendation------------------------------------------------------------74
10. Limitations-----------------------------------------------------------------------75
11. Bibliography/Reference--------------------------------------------------------76
12. Appendices (EDS Sheet)
4. EXECUTIVE SUMMARY
The project report mainly focuses on the work culture of Pepsi Varun
Beverages which is a FOBO (franchise owned business operations) type of
organization, competitive market of soft drinks industry shows the
competitiveness of its sales promotional strategies so as to retain its market
share and to play a major role in the market. Varun beverages as a franchise
bottling unit of Pepsi earns a major share of Indias market distributed all
over country. As according to the supply chain is concerned there are
various modes of supply of products to the market so that the product
reaches to the consumer at the right place, at the right time and at a right
price. The importance of maintaining a good supply chain is to satisfy
market demand with adequate supply i.e. to satisfy customer wants. Sales
activities are boosted by providing various sales promotional activities,
which include sales promotional schemes that attract the potential customers
who are eager to make Pepsi as their brand of choice.
The effectiveness of the supply chain activities in the Noida region has
been given the attention so that the customer especially the retailers who are
the key players of the market get the product as and when needed. Thus to
increase market share and to increase market competitiveness against its
competitor attractive schemes are launched to increase demand for goods

and also to increase consumers for its products. Since in FMCG sector
demand for goods keeps on changing depending on market conditions and
fast changing consumer taste and preferences, one has to maintain a good
knowledge about changing market conditions and accordingly make
strategies to maintain its market position. Therefore a good supply chain
strategy has to be maintained so as to cater to market demand and also to
reach out to new potential customers. Strategies have to keep on changing
according to market condition and therefore various schemes are being used
to maintain demand for the product. It has to prepare strategy so as to
increase demand for its products and also to see that the demand and supply
position is maintained. So in order to be competitive, one to has keep on
analysing its market position and competitor, make strategies to hold on to
its current market position and also to look out for new market opportunities.
Thus this project report mainly focuses on the study of supply chain
activities of Pepsi, its market reach and how they balance the supply
activities with varying market demand.
The study tries to understand the major activities that involve in a FMCG
sector regarding supply of products to the market and hence finding out the
major flaws and accordingly suggesting solutions to the problems. The
report also focuses on the market competition faced by Pepsi in Noida and
analysing the market position of Pepsi as against its competitor. It tries to
analyze the feasibility of sales strategy used by Pepsi as compared to its
competitor.
5. OBJECTIVE OF THE STUDY

1) PRIMARY OBJECTIVE
The primary objective of the study is to analyze the effectiveness of
supply chain procedure of Pepsi and to compare the market competitiveness
of Pepsi against its competitor.
2) SECONDARY OBJECTIVE
Study of the supply chain activities of Pepsi.
To give recommendations for improving the supply chain
activities.
Analysing the proper functioning of schemes
To check out the functioning of product display of Pepsi.
Study of market share of Pepsi in Noida.
To study and analyze consumer behavior in soft drinks
industry.
6. METHODOLOGY
6.1 THE RESEARCH FRAME:
1. Channel through which the customers are getting the product:
Grocery
Eatery
Convenience
Institutional
2. Status of Cola in shops:
Pepsi
Coca Cola
Mix
3. Chilling equipment found in the shop:
VISI Cooler
OYC
Own Cooler
Ice Box
4. Display status of Pepsi or Coke in shop:
Glow Sign Board

DPS
Wall Painting
Counter
Rack
In The Shop
5. Average daily peak sales (in crates):

Pepsi
Coke
6.2 METHODOLOGY FOR ANALYSING SUPPLY CHAIN:

Marketing research specifies the information required to address issues,
designs the method for collecting information, manages and implements the
data collection process, analysing the results, and communicate the findings
and their implementation.
In this research process the data is collected through different sources and
interpreting it in desired way, once the objective is clear, different
techniques and methods are adopted to achieve them. The methodology used
for this project work is very simple. The main aim of supply chain activities
of the company is to fulfill the demand for their products at every corner of
their operations. They have to fulfill the demand for supply of entire Noida
region. To gather information regarding the supply chain activities a general
questionnaire was drafted. In case of any additional information required,
direct questions were asked to the retailers and distributors and the answers
were taken on a plan sheet. Distributors are the people who gave some
relevant information about the marketing plan and other operations which
are related to supply chain. They gave information regarding the quality of
supply chain activities of the company and the areas where they are facing
problems. Questions were asked regarding the quality of sales service
provided by the company sales personnel i.e. were they getting the products
on time, in right quantity and in all flavour. Questions were asked regarding
awareness of schemes provided by the company and the availability of those
schemes. Since distributors are generally located in remote areas who then
supply their products to small retailers in the interior parts. So information
was gathered regarding the mode of transport of supplying their products to
those areas and the basic problems faced by them in this process.
Information regarding the retailers was also collected through

questionnaire and direct questions put forward to them. In order to analyze
the supply chain activities to retail business, datas were collected from 800
retailers and average information were collected. Retailers were mainly
asked about the availability of adequate supply during peak seasons.
Problems faced by them in getting the damaged products replaced from the
company and the quality of service provided by the company sales man. It
has been tried to find out what is the main reason behind the retailers
keeping more of stock of a particular brand than the other. The important
reason that has been considered is retailers good relation with route agent,
availability of heavy discounts or higher schemes or distribution of assets by
the company to boost up sales. All this factors directly or indirectly affect
the demand for companys product hence they play an important role in
demand supply position of a particular region.
The steps involved in research methodology are research question,
hypothesis formulation, research design, and data collection method,
sampling plan, fieldwork, data analysis and interpretation. The datas
collected through this process were analyzed and an inference was drawn in
terms of the problems faced in the supply chain. In order to make this study
10
more reliable I had to make use of some of the analytical tools and then in
the end inferences were drawn on the basis of matter collected from the
distributors and retailers.
To know about the market share and market competency strategy
followed by Pepsi, datas were collected from different retailers through out
the entire Noida region. The datas were collected through a prescribed
questionnaire and information regarding the current market scenario was
known.
7. MAIN REPORT
7.1 HISTORY OF PEPSI:
PepsiCo, Inc. was founded by Donald M. Kendall, President and Chief
Executive Officer of Pepsi-Cola and Herman W. Lay, Chairman and Chief
Executive Officer of Frito-Lay, through the merger of the two companies.
Pepsi-Cola was created in the late 1890s by Caleb Bradham, a New Bern,
N.C. pharmacist. 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. Kendall is president and
chief executive officer. The company reported sales of $510 million and had
19,000 employees.
Major products of the companies are:
Pepsi-Cola Company - Pepsi-Cola (formulated in 1898), Diet Pepsi
(1964) and Mountain Dew (introduced by Tip Corporation in 1948).
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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),
Cheeotos 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."
Major Milestones of Pepsi in subsequent years:
1966 Milestones:
Doritos brand tortilla chips are introduced. They are destined to
become the most popular snack chip in the U.S.
Pepsi enters Japan and Eastern Europe.
1967 Milestones:
Pepsi Generation advertising, "Come Alive! You're in the Pepsi
Generation" campaign that named and claimed a whole generation
(1963-67), introduces a new theme: "Taste that beats the others cold.
Pepsi pours it on!"
1968 Milestones:
North American Van Lines (NAVL), a premier transportation
company, joins PepsiCo. NAVL remains a strong contributor to
PepsiCo until it is divested in 1984.
1969 Milestones:
Bold, modern Pepsi-Cola packaging using red, white and blue is
introduced. "You've got a lot to live, Pepsi's got a lot to give,"
becomes the advertising theme.
Frito-Lay introduces Funyuns brand onion flavored snacks.
Mountain Dew changes its slogan to "Get That Barefoot Feelin'
Drinkin' Mountain Dew."
1970 Milestones:
PepsiCo sales pass the $1 billion mark. The company has 36,000
employees.
PepsiCo moves from New York City to new world headquarters in
Purchase, N.Y. The new corporate headquarters feature a building by
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one of America's foremost architects, Edward Durrell Stone (19021978), set on a campus of 144 acres amid an outdoor sculpture garden.
W.C. Fritos is introduced as Frito-Lay's new advertising mascot.
Wilson Sporting Goods, a top name in sports equipment, joins
PepsiCo. It is divested in 1985.
Pepsi introduces the industry's first two-liter bottle.
Pepsi is the first company to respond to consumer preference with
lightweight, recyclable, plastic bottles.
1971 Milestones:
PepsiCo Chief Executive Officer Donald M. Kendall assumes the
position of chairman of the Board of Directors on the retirement of
Herman W. Lay. Lay maintains an active role in the corporation until
his death December 6, 1982.
Andrall E. Pearson is appointed president of PepsiCo, a position he
holds until his retirement in 1984.
1972 Milestones:
Mountain Dew, acquired by Pepsi-Cola in 1964, switches its
advertising and package graphics from hillbillies to action-oriented
scenes. Sales climb and Mountain Dew will become one of the 10
best-selling soft drinks in the United States.
Don Kendall announces agreement making Pepsi-Cola the first
foreign product sold in the then U.S.S.R. PepsiCo is given exclusive
rights to import Stolichnaya Russian vodka in the U.S.
1973 Milestones:
Foods International, later called PepsiCo Foods International (PFI)
and subsequently named Frito-Lay International, is established to
market snack foods around the world.
The third Mountain Dew slogan appears "Put A Little Yahoo in Your
Life."
1974 Milestones:
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PepsiCo sales pass the $2 billion mark.

Pepsi-Cola becomes the first American consumer product to be
produced, marketed and sold in the former Soviet Union.
1975 Milestones:
PepsiCo has 49,000 employees.
Pepsi Light, with a distinctive lemon taste, is introduced as an
alternative to traditional diet colas.
1976 Milestones:
The Pepsi Challenge, introduced in Dallas, Tex. in 1975, becomes a
national campaign. Around the nation, consumers select Pepsi-Cola as
the best tasting cola.
PepsiCo adopts Code of Worldwide Business Conduct.
Pepsi-Cola becomes the single largest selling soft drink brand sold in
U.S. supermarkets. Advertising campaign is "Have a Pepsi day!"
"Puppies," becomes one of America's best-loved ads.
1977 Milestones:
PepsiCo acquires Pizza Hut; Inc. Pizza Hut was founded in 1958 by
Dan and Frank Carney. It is spun off along with Taco Bell and KFC
businesses as Tricon Global Restaurants, Inc. in 1997.
PepsiCo passes the $3 billion mark in sales.
1978 Milestones:
Taco Bell is acquired. Taco Bell was established in the mid 1960s by
Glen Bell. It is spun off along with Pizza Hut and KFC businesses as
Tricon Global Restaurants, Inc. in 1997. Later becomes YUM.
1979 Milestones:
Opening of PepsiCo Research and Technical Center in Valhalla, N.Y.
PepsiCo reaches $5 billion in sales.
1980 Milestones:
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PepsiCo Food Service International (PFSI) is formed to focus on

overseas development of restaurants.
PepsiCo now has 111,000 employees.
First presentation of the international Donald M. Kendall Bottler-ofthe-Year Award.
Pepsi is #1 in sales in take-home market.
1981 Milestones:
PepsiCo passes $7 billion in sales.
PepsiCo and China reach agreement to manufacture soft drinks, with
production beginning in 1982.
PepsiCo launches PepsiCo Food Systems (PFS), its restaurant supply
company. PFS is sold to AmeriServe in 1997.
1982 Milestones:
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 Milestones:
The Bottler Hall of Fame is established to recognize the achievement
and dedication of international bottlers.
1984 Milestones:
PepsiCo is restructured to focus on its three core businesses: soft
drinks, snack foods and restaurants. Transportation and sporting goods
businesses are sold.
Wayne Calloway becomes president of PepsiCo.
Diet Pepsi is reformulated with 100% NutraSweet.
Slice and Diet Slice, the first major soft drinks with fruit juice, are
introduced.
Pepsi-Cola makes advertising history as Michael Jackson and his
brothers usher in a new generation of Pepsi-Cola advertising in two of
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the most eagerly-awaited television commercials featuring music

marketing. Pepsi becomes "The Choice of a New Generation."
Herman W. Lay Award of Excellence established at Frito-Lay to
recognize world-class selling excellence.
1985 Milestones:
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-Cola products are available in nearly 150 countries and
territories around the world. Snack food operations are in 10
international markets.
The cola war takes "one giant sip for mankind," when a Pepsi "space
can" is successfully tested aboard the space shuttle.
Pepsi distributes products in China.
1986 Milestones:
Wayne Calloway becomes chairman of the Board of Directors and
chief executive officer in May when Donald M. Kendall retires.
PepsiCo purchases Kentucky Fried Chicken, the leader in the quick
service chicken market. KFC was founded by Colonel Harland
Sanders. Colonel Sanders began franchising the company in 1952.
KFC is spun off along with Pizza Hut and Taco Bell businesses as
Tricon Global Restaurants, Inc. in 1997.
PepsiCo purchases Seven-Up International, the third largest franchise
soft drink operation outside the United States.
PepsiCo passes $10 billion in sales.
PepsiCo is listed on the Tokyo stock exchange.
Diet Pepsi gets a new logo.
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1987 Milestones:
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 Milestones:
Pepsi-Cola International enters a landmark joint venture agreement in
India.
Hostess Frito-Lay, a major new partnership in Canada, is formed with
Hostess Foods in Canada.
"Chase," a four-part Pepsi ad featuring Michael Jackson in his firstever episodic commercial, airs during the Grammy awards and
becomes the most-watched commercial in advertising history.
Worldwide retails sales of Doritos brand tortilla chips hit $1 billion. It
is the world's largest selling snack chips brand.
1989 Milestones:
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 Milestones:
PepsiCo signs the largest commercial trade agreement in history with
the Soviet Union.
PepsiCo profits exceed $1 billion for the first time.
1991 Milestones:
PepsiCo acquires an equity interest in Wedel SA, the leading
manufacturer of chocolate and confectionery in Poland Snacks now
include operations in 23 countries.
Pepsi-Cola introduces a new logo, its eighth in 93 years. Advertising
features rap singer MC Hammer.
17
Pepsi-Cola forms joint venture with Thomas J. Lipton Co. to develop

and market tea-based drinks.
1992 Milestones:
PepsiCo purchases an equity interest in California Pizza Kitchen. It is
sold in 1997.
Frito-Lay and General Mills agree to merge snack food businesses in
Europe.
Pepsi-Cola begins distribution of Lipton's line of ready-to-drink teas
nationwide.
1993 Milestones:
Both PepsiCo beverages and snack food operating profits pass the $1
billion mark.
Pepsi introduces "The Cube," an innovative 24-can multipack that
satisfies growing consumer demand for convenient large size soft
drink packaging.
Pepsi-Cola International introduces Pepsi Max, a soft drink with
unique blend of sweeteners that delivers maximum cola taste in a nosugar product.
Pepsi-Cola introduces Aquafina bottled water into test market.
1994 Milestones:
Pepsi-Cola International acquires Indian company, its first big bottling
plant in Bombay.
PepsiCo and Starbucks form the North American Coffee Partnership
to jointly develop ready-to-drink coffee beverages.
Pepsi-Cola licenses the Citrus Hill trademark from The Procter &
Gamble Co. to launch a line of fountain juices and drinks.
Wake Forest University names its School of Business and
Accountancy in honor of Wayne Calloway.
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PepsiCo sales reach $30.4 billion. There are 470,000 employees

worldwide, making PepsiCo the third largest employer.
1995 Milestones:
Pepsi-Cola introduces "Nothing else is a Pepsi" theme line.
7Up International launches 7UP Ice Cola, a new clear cola.
PepsiCo will introduce Lay's brand potato chips in 20 markets
throughout the world.
PepsiCo is on-line at http://www.pepsico.com
1996 Milestones:
Pepsi-Cola launches Pepsi World at http://www.pepsi.com
Pepsi-Cola domestic and international operations combined into
Pepsi-Cola Company. International and domestic snack food
operations combined into one business unit called Frito-Lay
Company.
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, Tricon 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.
Roger Enrico succeeds Wayne Calloway as chief executive officer
and chairman of the Board of Directors.
1997 Milestones:
Pepsi-Cola North American bottling operations become a separate
unit called The Pepsi-Cola Bottling Co.
Frito-Lay announces plans to buy the 104-year-old snack, Cracker
Jack, a candy-coated mix of popcorn and peanuts from Borden Foods
Corp.
19
Pepsi-Cola kicks off the celebration of its 1998 100th Anniversary

with first worldwide bottlers conference, held in Hawaii. The event is
held during the same time as first bottler's conference.
1998 Milestones:
PepsiCo Chairman and CEO Roger A. Enrico donate his salary to
provide scholarships for children of PepsiCo employees.
Former Chairman and CEO Wayne Calloway die on July 9th. He
joined PepsiCo in 1967 becoming its Chairman and CEO in 1986.
PepsiCo acquires Tropicana Products from Seagram Company Ltd.,
the biggest acquisition ever undertaken by PepsiCo. Tropicana was
founded in 1947 by Anthony Rossi. Its major brand is Tropicana Pure
Premium Juices.
1999 Milestones:
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.
Steve Reinemund named president of PepsiCo.
Tropicana juices are entering the huge India market for the first time.
Spearheaded by Tropicana Asia Pacific, orange juice will appear in
the New Delhi and Bangalore markets.
Frito-Lay introduces a new corporate logo.
2000 Milestones:
Pepsi-Cola teams up with Yahoo Inc., the biggest web navigation
company, in a multimedia marketing campaign aimed at teens and
young adults.
Aquafina brand bottled water becomes the best-selling brand of
single-serve bottled water in US retail channels.
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Pepsi-Cola launches "Sierra Mist" a caffeine-free, lemon/lime soda.

PepsiCo, Inc. and The Quaker Oats Company reached an agreement to
merge.
PepsiCo sales are $20 billion and the company has 125,000
employees at year end.
PepsiCo launches Diversity@work, http://www.pepsico.com/diversity
website.
2001 Milestones:
Pepsi-Cola launches the bold new Mountain Dew Code Red
nationwide. It is Mountain Dew's first line extension since the
introduction of Diet Mountain Dew in 1988.
May 2 -The Board of Directors of PepsiCo, Inc. elected Steven S
Reinemund chairman of the board and chief executive officer,
succeeding Roger Enrico who will become vice chairman. The board
also elected Indra K. Nooyi as a director and gave her the additional
title of president of PepsiCo in addition to CFO.
SLAM, the orange brand Mirinda, is launched in Italy.
2002 Milestones:
Gatorade introduces new Gatorade ICE in three flavors- Orange, Lime
and Strawberry.
Gatorade turns 35. It was created in 1960s to help performance of
Florida Gators football team and now is the leading sport drink.
PepsiCo reorganizes to unite all North American beverage operations,
including Pepsi-Cola, Tropicana and Gatorade, into one new division
-- PepsiCo Beverages and Foods North America.
PepsiCo announces $5 billion share repurchase program.
Brand Pepsi has a new look.
2003 Milestones:
Pepsi-Cola signs an exclusive four-year sponsorship deal with the
Canadian Hockey Association, making Pepsi the official soft drink.
Pepsi announces four-year sponsorship agreement with the UK
Football Association.
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PepsiCo creates PepsiCo International, the business that will unite all
international snack, beverage and food units in an effort to drive faster
growth and improved profitability around the world.
PepsiCola trademark turns 100 years old.
2004 Milestones:
Frito-Lays 24-count Multi-Sack variety pack won the Institute of
Packaging Professional's (IoPP) Integrity Award, one of the industrys
top awards, at this years AmeriStar Packaging Awards.
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.
2005 Milestones:
PepsiCo Celebrates 40th Anniversary
PepsiCo International announced the appointment of Pioneer Foods, a
leading South African food and beverage company, as its franchisee
in the Republic of South Africa.
PepsiCo Donates $2 Million to Pakistan Earthquake Victims
Pepsi Partners with Harvey's, Swiss Chalet and Milestone's
Restaurants
2006 Milestones:
PepsiCo India re-launches Mirinda.
In selected cities cross the United States, Pepsi distributes more than
three million free cans of newly reformulated Diet Mountain Dew,
marking the largest single-day sampling effort in company history
Starbucks and PepsiCo sign a distribution agreement for Ethos Water
Indra Nooyi named Chief Executive Officer of PepsiCo as of October
1, 2006
2007 Milestones:
PepsiCo signs Maria Sharapova for International endorsement of
Gatorade and Tropicana
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Tropicana launches Tropicana Healthy Heart with Omega-3s, the first

national orange juice to include omega-3s
Ruffles unveils new packaging to reflect its switch to 100% pure
sunflower oil
Aquafina launches Aquafina Alivea low calorie, vitamin-enhanced
water beverage
Quaker Oats debuts new Quaker Life Chocolate Oat Crunch Cereal
Flat Earth Fruit and Vegetable Crisps hit stores nationally
Fritos Corn Chips celebrates 75th Anniversary with retro packaging
Near East celebrates its 45th Anniversary with a recipe contest
Tropicana launches Tropicana Fruit Squeeze, a 20-calorie drink with
real Tropicana fruit juice
Lays launches Share the Joy program to help the Make a Wish
Foundation raise funds
Pepsi-Cola North America launches Diet Pepsi MAX
New Quaker Mini Delights launches offering great taste and portion
control in a satisfying serving of mini snack cakes
Diet Pepsi Jazz introduces new Caramel Cream flavor
Grandmas Cookies offering limited-edition flavors for spring: Iced
Lemon and Sugar flavors
Walkers is the first major food brand in the world to display a carbon
footprint reduction logo on its packs
PepsiCo Announces 25% Dividend Increase and Raises Share
Repurchase Target; Nooyi Assumes Chairman Title
EPA Names PepsiCo 2007 ENERGY STAR(R) Partner of the Year
PepsiCo Makes Largest Corporate Purchase of Renewable Energy
Certificates
Pepsi launches Design Our Pepsi Can National Promotion
Tropicana unveils New Organic Line Tropicana Organic QTG
facility earns an Energy and Environmental Design (LEED) Gold
certification from the U.S. Green Building Council
PCNA and Frito-Lay launch Shrek the Third National Summer
Promotion
Indra Nooyi receives the Outstanding American by Choice Award.
7.2 PEPSI CO OVERVIEW:

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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 $92 billion.
Some 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.
PepsiCos mission is To be the world's premier consumer Products
Company focused on convenient foods and beverages. It seeks to produce
healthy financial rewards to investors as they provide opportunities for
growth and enrichment to their employees, their business partners and the
communities in which they operate. And in everything they do, it strives for
honesty, fairness and integrity.
SHAREHOLDERS:
PepsiCo (symbol: PEP) shares are traded principally on the New York
Stock Exchange in the United States. The company is also listed on the
Amsterdam, Chicago and Swiss stock exchanges. PepsiCo has consistently
paid cash dividends since the corporation was founded.
CORPORATE CITIZENSHIP:
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At PepsiCo, it believes that as a corporate citizen, it has a responsibility

to contribute to the quality of life in its communities. This philosophy is
expressed in its sustainability vision which states: PepsiCos responsibility
is to continually improve all aspects of the world in which they operate
environment, social, economic -- creating a better tomorrow than today.
Its 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.
PEPSI CO HEADQUARTERS:
PepsiCo World Headquarters is located in Purchase, New York,
approximately 45 minutes from New York City. The seven-building
headquarters complex was designed by Edward Durrell Stone, one of
America's foremost architects. The building occupies 10 acres of a 144-acre
complex that includes the Donald M. Kendall Sculpture Gardens, a worldacclaimed sculpture collection in a garden setting.
The collection of works is focused on major twentieth century art, and
features works by masters such as Auguste Rodin, Henri Laurens, Henry
Moore, Alexander Calder, Alberto Giacometti, Arnaldo Pomodoro and Claes
Oldenberg. The gardens originally were designed by the world famous
garden planner, Russell Page, and have been extended by Franois Goffinet.
The grounds are open to the public, and a visitor's booth is in operation
during the spring and summer.
7.3 PEPSI CO. INDIA:

25
PepsiCo entered India in 1989 and in the span of a little more than a
decade, has grown to become the countrys largest selling food and beverage
companies. One of the largest multinational investors in the country,
PepsiCo has established a business which aims to serve the long term
dynamic needs of consumers in India. The group has built an expansive
beverage, snack food and exports business and to support the operations are
the groups 37 bottling plants in India, of which 16 are company owned and
21 are franchisee owned. In addition to this, PepsiCos Frito Lay snack
division has 3 state of the art plants. PepsiCos business is based on its
sustainability vision of making tomorrow better than today.
PEPSI CO. INDIA PRODUCTS:
26
PepsiCo Indias expansive portfolio includes iconic refreshment

beverages Pepsi, 7UP, Mirinda and Mountain Dew, in addition to low
calorie options Diet Pepsi and 7UP Light, hydrating and nutritional
beverages such as Aquafina drinking water, isotonic sports drinks Gatorade, and 100% natural fruit juices and juice based drinks Tropicana
and Slice. Other local brands Lehar Everess Soda, Dukes Lemonade and
Mangola complete their diverse spectrum of brands.
PepsiCos snack food company, Frito-Lay, is the leader in the branded

potato chip market and was amongst the first companies to eliminate the use
of trans fats and msg in its products. It manufactures Lays Potato Chips;
Cheetos extruded snacks, Uncle Chips and traditional namkeen snacks under
the Kurkure and Lehar brands. Quaker Oats, Lehar Lites, low fat and roasted
snack options enhance the choices available to the growing health and
wellness needs of consumers.
7.4 ABOUT RKJ GROUP:

27
It can be said with absolute certainty that the RKJ Group

has carved out a special niche for itself. The services touch
different aspects of commercial and civilian domains like
those of Bottling, Food Chain and Education. Headed by Mr.
R. K. Jaipuria, the group as on today can lay claim to
expertise and leadership in the fields of education, food and
beverages.
The business of the company was started in 1991 with a tie-up with Pepsi
Foods Limited to manufacture and market Pepsi brand of beverages in
geographically pre-defined territories in which brand and technical support
was provided by the Principals viz., Pepsi Foods Limited. The
manufacturing facilities were restricted at Agra Plant only.
VARUN BEVERAGES LTD:

Varun Beverages Ltd. is the flagship company of the
group. The group also 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. It has total 46 Pizza Hut
Restaurants & 1 KFC Restaurant under its company.
It diversified into education by opening their first school in Gurgaon
under management of Delhi Public School Society. The schools of the group
are run under a Registered Trust namely Champa Devi Jaipuria Charitable
Trust.
Companies are medium sized, professionally managed, unlisted and
closely held between Indian Promoters and foreign collaborators.
28
The group added another feather to its cap when the prestigious PepsiCo
International Bottler of the Year award was presented to Mr. R. K.
Jaipuria for the year 1998 at a glittering award ceremony at PepsiCos
centennial year celebrations at Hawaii, USA. The award was presented by
Mr. Donald M. Kendall, founder of PepsiCo Inc. in the presence of Mr.
George Bush, the 41st President of USA, Mr. Roger A. Enrico, Chairman of
the Board & C.E.O., PepsiCo Inc. and Mr. Craig Weatherup, President of
Pepsi Cola Company.
Vision:
Being the best in everything we touch and handle.
Mission:
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.
BUSINESS SEGMENTS OF RKJ GROUP:

The RKJ Group is divided into three business segments- Beverage, Food
and Education. It has a leading market position in each of its three business
segments. A balanced portfolio produced a solid business performance.
Products and services which look to the future ensure that they will be wellplaced in growth markets.
29
BEVERAGES:
Indian Beverages industrys 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 Non-Carbonated 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 flavours and
sub-brands 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.
30
FOOD:
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 groups 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.
Ice Creams under Candia brand:
The group has its presence in the Ice Cream segment since 1991,
when it started manufacturing and marketing Ice Cream under the
brand name of Gaylord in the state of U.P.
During 1996 it sold its brand to Brooke Bond and started supplying Ice
Cream to Hindustan Lever as their Ice Cream sourcing plant. After working
for 10 years in this field, during 2003 it has launched its own brand in
technical and marketing collaboration with Candia of France.
31
EDUCATION:
The R K J Group has been associated with excellence in education. It
strongly believes that investment in quality care and education for young
minds is essential for the future growth and development of our country. The
groups foray into the school education is intended to provide
exceptional opportunities for the development of the academic
abilities of the students. The schools run by the group encourage
students to become creative, innovative and imaginative. They have a wide
range of co-curricular activities, which are as important as the academic
disciplines.
School life merges with a plethora of activities to suit every schedule,
talent and interest in the areas like indoor and outdoor games, swimming, art
and culture, music and drama, Yoga and martial arts, community service,
etc. The school's approach to education has been designed to ensure that the
students realize their true potential and grow up to become complete
individuals and responsible citizens.
The groups foray into pre-school education is in line with educational
projects of the group. We see no competition because pre-school education
is a niche market. There is no specialized way of teaching pre-schoolers
here, says Jaipuria. The year 2001 witnessed the further spread of the
groups portfolio with the opening of its first school at Gurgaon under the
management agreement with Delhi Public School Society. To expand in the
field of education it opened its second school at Jaipur under the
management of same society.
The Group has entered into a join venture partnership with Modern
Montessori International (MMI) Singapore, to open pre-school educational
institutions across the country. Forming a new entity, Modern Montessori
International (MMI) India in which the Group will have 51 per cent equity
stake, the company invests Rs 200-crore investment in the Indian operations
in the next five years.
MMI India plans to open four schools by April 2004 and as many as 14
schools by 2005. The company will be opening its first school in Gurgaon.
The long-term agenda includes starting 20 schools each year with an
investment of Rs 5 crore in each school.
32
RATIONALE:
To hold the market share is major concern of any company while in the
case of Soft Drinks Company the market is between FOBO and COBO that
is Pepsi and Coca-Cola. To grab the market share, these companies are
flooding the market with different type of sales promotion schemes on daily,
weekly, monthly and annually basis. In this project the main reason of the
study is to find out the effectiveness of the schemes and the retention and
expansion of the market through sales promotion schemes.
7.5 CARBONATED SOFT DRINK INDUSTRY:

INDUSTRY STRUCTURE:
The three main teams in the in the production and the distribution of the
carbonated soft drinks are the concentrate producers, the bottlers and the
retailers who are actually responsible for the sales of the product. The
concentrate producers produce the concentrate and them sell it to the
bottlers, who adds a sweetener to the carbonated water and then pack it in
the bottles and cans. These bottlers can be either the Pepsi itself or the
franchisees who work on the behalf of Pepsi. One half of the sale of the
Pepsi is through the company owned bottlers (COBO) and other half of the
sale is through the franchisees bottlers (FOBO). FOBOs had the right to the
product and then sells it in the defined territory and is not allowed to market
the competitive brand. Then through the distribution channel the product
reaches to the retailer who finally sells the product to the consumers.
The principle retail outlets for the CSD are the supermarkets,
convenience stores, fountain services and thousands of small outlets.
33
PURCHASE AND CONSUMPTION PATTERN:

Industry research suggests that the purchase of the soft drink is
unplanned, i.e. sometimes it is more and sometimes it is less depending on
the demand in the market, the schemes that are provided to the retailers, the
displays provided, and the incentives given and on the relationship of the
salesman and the retailers.
The sale of soft drinks is a seasonal affair. The sale increase tremendously
during the summer season and falls down during the winter season.
34
MANUFACTURING PROCESS:
Water:
The water is available through the municipal supplies or through the
borings. This water is then treated by reverse osmosis process to obtain germ
free water. The water is also treated with some chemicals so that the water
that is obtained is pure and ready for consumption. The water is also passed
through the sand in order to filter it. This water thus obtained is soft and can
be used for manufacturing process of the carbonated soft drinks. The same
water is also used for washing of the used bottles.
Sugar Syrup Preparation:
The next step is the preparation of the sugar syrup, which is further used
to prepare the final concentrated syrup. In this the sugar is added to the germ
free water and heated to about 85 degrees of temperature in a steam jacketed
stainless steels tank of adequate capacity with an agitator, so that the sugar
gets well dissolved in the water. The solution is boiled for about 20 minutes
so that the syrup gets bit thick. This also kills the germs present in the water.
The syrup is then filtered through the filter press at a high speed so that
further impurities can be removed from the syrup. Then this syrup is cooled
to a definite temperature with the help of a S.S Plant Heat Exchanger.
Finished Syrup:
In the preparation of the finished syrup, additional water is added to the
raw syrup in the correct quantity along with some essence. The solution is
mixed thoroughly with an agitator provided in the S.S tank and allowed to
mature according to the specified time limit. This time differs for each
flavor.
35
Beverage Preparation:
In this step the ready syrup is passed through the intermix unit where
more water is added to the syrup to prepare the final product. Now this
beverage is chilled to a very low temperature and is pumped into the
saturator carbonator. Carbonator is the stainless steel vessel consisting of a
number of S.S film plates. This vessel is a pressure vessel where high
pressure is maintained, so that the CO2gets well mixed with the cold water.
The S.S plates forms a very thin film of the beverage on the plates. After this
the beverage is filled in the glass bottles under high pressure, so that no air
remains inside the bottles because this can spoil the soft drink.
Filling:
Filling of the beverage in the bottles is done through the automatic
counter pressure filters, which fills the bottles at a high speed, and the
bottles are crowned with the caps automatically.
Washing of the bottles:
Washer, which consists of the soaking compartments. These
compartments contain caustic soda and a number of jets where soft water
and hot The bottles, which come back from the markets, are washed with the
help of bottle caustic soda solutions are used to clean the bottles. These
cleaned bottles are then inspected before they go for refilling. They are
passed through the bottle conveyer. Then they are passed through the LimLight inspection machine and then through the Mit-Mirror machine for
finding out the cracks. After all these inspection the bottles are sent for
refilling. The bottles are again checked and then packed in the groups of 24.
Quality control:
The success of any industry depends on the quality of the product it
provides. Therefore quality measurements are done on each step in order to
ensure that the product that finally reaches the consumer is fit for
consuming. The packed bottles are checked for the gas content, sugar
content, organic and for the microbiological quality. Here the quality
invariable remains the constant because of the continuous on line checking.
36
7.6 MARKETING MIX:

PRODUCTS:
Pepsi makes Carbonated Soft Drinks i.e. cola and non-cola flavor.
Core Brands:
PEPSI
MIRINDA LEMON
MIRINDA ORANGE
SLICE
MOUNTAIN DEW
7 UP
AQUAFINA
SODA
PACKAGES:
Two types: single serve and multi serve

67 packages sizes and types
Materials: glass, plastics & cans
Packages may be returnable or non returnable.
37
PRICING:
QUANTITY
PRICE
1. PEPSI
200 ml
300 ml
330 ml (CAN)
600 ml
2 lit
Rs.7
Rs.10
Rs.20
Rs.20
Rs.48
200 ml
300 ml
330 ml (CAN)
600 ml
2 lit
Rs.7
Rs.10
Rs.20
Rs.20
Rs.48
2. MIRINDA LEMON
3. MIRINDA ORANGE
200 ml
300 ml
330 ml (CAN)
600 ml
2 lit
Rs.7
Rs.10
Rs.20
Rs.20
Rs.48
200 ml
300 ml
330 ml (CAN)
600 ml
2 lit
Rs.7
Rs.10
Rs.20
Rs.20
Rs.48
4. MOUNTAIN DEW
38
QUANTITY
PRICE
200 ml (TETRA)
250 ml
500 ml
1.2 lit
Rs.10
Rs.10
Rs.22
Rs.45
500 ml
750 ml
1 lit
2 lit
Rs.8
Rs.20
Rs.12
Rs.20
300 ml
600 ml
Rs.6
Rs.10
600 ml
Rs.23.5
600 ml
Rs.23.5
5. SLICE
6. AQUAFINA
7. SODA
8. PEPSI GOLD
9. MIRINDA SORBET
10. PEPSI DIET

33O ml (CAN)
600 ml
Rs.25
Rs.20
200 ml
300 ml
330 ml (CAN)
600 ml
2 lit
Rs.7
Rs.10
Rs.20
Rs.20
Rs.48
11. 7 UP
39
7.7 OPERATIONAL STRUCTURE OF MARKETING

DEPARTMENT:
CHAIRMAN
UNIT MANAGER
TDM
(Territory Development
Manager)
ADC
(Account
Development
Coordinator)
MDM
(Marketing Development
Manager)
CE
(Customer
Executive)
MDC
(Marketing
Development
Coordinator)
SALESMAN
MDE
(Marketing
Development
Executive)
ROUTE AGENT
40
7.8 ROUTINE ACTIVITIES OF THE SALES MAN:

Start
Check in
Meet the C.E.
Drive to
gate
Checking of load
by C&F worker
Order the
Load
Collect gate pass

and attend the gate
meeting. Ask for
the daily scheme
Rechecking
of load
Ask for the

order
Deliver the
order
Merchandise
the outlet
Fill the route

book
Plans next
visit
End
Check empties
Prepare the
cash memo
Thanks the
customer
Fill the complaint

register and place the
order. Deposit the cash
to cashier
Pre plan strategy
Collect Route
Book/ Forms
Check out
Visit First outlet
Present the
scheme
Fill Visi cooler
Collect money
Complete the
route
Check in
Greet retailer
Create stack
Ask for any

problem
Back to
depot
Count the empties

and match it with
gate pass load
41
PEPSI 10 STEP CALL:

Greet the customer by name.
Collect and sort all empties from the storeroom.
Communicate marketing programmes and scheme to the customer.
Leverage the route book and refill the empties.
Arrange warm product displays (in the shop).
Charge cooler, ensure 100% purity.
Arrange crate display outside the outlet.
Put up POS at eye level.
Prepare cash memo, collect cash and fill up the route book.
Thanks the customer.
42
7.9 INTRODUCTION TO SUPPLY CHAIN

MANAGEMENT:
Supply Chain Management refers to the analysis of and effort to improve
a companys process for product and service design, purchasing, invoicing,
inventory management, distribution, customer satisfaction and other
elements of the supply chain. Supply Chain Management usually refers to an
effort to redesign supply processes in order to achieve to streamlining.
Supply Chain Management is a coordinated set of techniques to plan and
execute all steps in the global network used to acquire raw materials from
vendors, transform them into finished goods, and deliver both goods and
services to customers. It includes chain-wide information sharing, planning,
resource synchronization and global performance measurements. Supply
chain management (SCM) is the oversight of materials, information and
finances as they move in a process from supplier to manufacturer to
wholesaler to retailer to consumer. Supply chain management involves
coordinating and integrating these flows both within and among companies.
It is said that the ultimate goal of any effective supply chain management
system is to reduce inventory (with the assumption that products are
available when needed). As a solution for successful supply chain
management, sophisticated software systems with Web interfaces are
competing with Web-based application service providers who promise to
provide part or all of the SCM service for companies who rent their service.
Supply chain management flows can be divided into three main flows:
The product flow
The information flow
The finances flow
The product flow includes the movement of goods from a supplier to a
customer, as well as any customer returns or service needs. The information
flow involves transmitting orders and updating the status of delivery. The
financial flow consists of credit terms, payment schedules, and consignment
and title ownership arrangements.
43
There are two main types of SCM software: planning applications and
execution applications. Planning applications use advanced algorithms to
determine the best way to fill an order. Execution applications track the
physical status of goods, the management of materials, and financial
information involving all parties.
Some SCM applications are based on open data models that support the
sharing of data both inside and outside the enterprise (this is called the
enterprise, and includes key suppliers, manufacturers, and end customers of
a specific company). This shared data may reside in diverse database
systems, or data warehouses at several different sites and companies.
FIVE BASIC COMPONENTS FOR SUPPLY CHAIN
MANAGEMENT:
1. Plan-This is the strategic portion of supply chain management. One
needs a strategy for managing all the resources that go towards
meeting customer demand for ones product or service. A big piece of
planning is developing a set of metrics to monitor the supply chain so
that it is efficient, costs less and high quality and value to customers.
2. Source-Choose the suppliers that will deliver the goods and services
one needs to create ones product or service. Develop a set of pricing,
delivery and payment process with suppliers and create metrics for
monitoring and improving the relationships. And put together process
for managing the inventory of goods and services one receive from
suppliers, including receiving shipments, verifying them, transferring
them to your manufacturing facilities and authorizing supplier
payments.
3. Make-This is the manufacturing step. Schedule the activities
necessary for production, testing, packaging and preparation for
delivery. As the most metric-intensive portion of the supply chain,
measure quality levels, production output and worker productivity.
44
4. Deliver-This is the part that many insiders refer to as logistics.

Coordinate the receipt of orders from customers, develop a network of
warehouses, pick carriers to get products to customers and set up an
invoicing system to receive payments.
5. Return-The problem part of the supply chain. Create a network for
receiving defective and excess products back from customers and
supporting customers who problems with delivered products.
45
7.10 INTRODUCTION TO SUPPLY CHAIN OF PEPSI CO.:

Pepsi is a well established brand and has to take care of heavy demand for
their product in the market. Since there is heavy demand for their product in
the market they have to take care of their distribution channel very seriously.
They have maintained a very good balance between the responsiveness and
the efficiency of the distribution channel.
Supply chain of Pepsi is very simple; there are two type of supply route
from where the goods are transported. The 1st care is when the bottle comes
from Greater Noida bottling plant and then it is moved to the distributor and
from there it moves to the retailer.
Retailer counter that means supply chain has 4 stages:
1. Manufacturer
2. Distributor
3. Retailer
4. Customer
46
EXISTING SUPPLY CHAIN OF PEPSI CO:

Pepsi passes through 3 stages to reach the final customer. The product
comes from the plant situated at Greater Noida from there with the help of
companys transporters it reaches to the distributor warehouse. The
distributor for Noda area is situated in sec-66 of Noida under the name of
Varun Beverages ltd. Generally the distributor places order to the company
and get the requested order within two days, but there are some norms which
are lead by the company, which are as follows:
1. The payment should be paid in advance.
2. 15% of transportation cost is managed by distributor as well as transit
insurance is managed by the distributor.
So well the goods are manufactured and kept as inventory in the
warehouse of the company at Greater Noida from there it is allocated on
trucks and reach to the distributors warehouse within 2 days, but the order
is displaced in the consent with the requirement of distributor. There is a
limit on minimum number of crates which has to be ordered by the
distributor i.e. 500 crates and then with the help of work force the distributor
has to move these goods to the retail counter. It is the responsibility of the
distributor to see that there is a ready availability of the product in the
market through its work force sales persons, which is to be occasionally
checked by the company people. There are four distributors in the Noida
region which are situated in different locations to every corner of the city.
Modus operand of the distributor to make the availability of the product
in the market is quite tough. The sales person under the distributor has to
visit each and every retailer in their area daily so that there should be no
shortage of the product in the market.
47
The distributor has to supply its goods from its depot to various retailers
in the market with the help of its work force. The distributor performs this
task with the help of local transportation which is either owned or hired by
the distributor for this purpose. The distributor has to look upon several
other things which are important in day to day functions. Its job starts from
when the goods reach the depot, firstly it has to check that the number of
crates are in order which are being unloaded from the trucks, sorting of the
goods received and removing the damaged goods. After the goods are been
unloaded they are stored in an appropriate order in the depot. Goods one
stored are then distributed with the help of several sales people. Every sales
person is given a particular route in which he has to supply the goods. The
sales persons are provided with trucks or other smaller vehicles like tempos
to carry the goods from the depot to the market. The goods are loaded into
every vehicle depending on the type of sales mans route; the goods when
loaded are counted on the depot gate and a gate pass is given to the sales
person mentioning the amount of goods carried out on that particular day.
The sales person along with a helper then goes out in the market to deliver
the goods to the retailers. The main job of the sales man is to deliver the
goods to the retailers, arrange the products in the retailers VISI cooler,
informing the retailer about the schemes available & about the new products,
give the receipt of the product to the retailer and take payment in cash with
the counter part of the receipt duly signed by the retailer. The sales man has
also to bring back the empties back to the depot and the damaged products
as and when returned by the retailer.
After the empty bottles are brought back to the depot, the empties are
then sorted out and then sent back to the bottling plant. The distributor has
also to manage the proper stock keeping of the empties; the simple rule that
is followed by the distributor in this case is, for every bottle of soft drink
sold on a particular day the sales person should bring the exact number of
empties back to the depot.
48
Once the goods have reached to the retailer store the last stage of the
supply chain starts, where goods are transferred from retailer to the ultimate
customer. It is the consumer who finally consumes the product and therefore
the retailer has to know the taste and preference of the customer. A retailer
needs to provide a customer ample number of product choices to choose
from. Therefore a retailer likes to keep large variety of products so that he
can cater to the demand of large number of customer. Therefore a distributor
has to make sure that retailer is provided with sufficient amount of its
products. In case of distribution channel of Pepsi the distributor has to
maintain ready and continuous supply of goods to the retail outlets because
in FMCG sector the consumer quickly moves to its substitutes goods due to
non availability of the product. The demand for goods is this market is very
volatile and keeps on changing according to consumer changing taste and
preference. So in order to avoid loosing market the distributor has to keep an
eye on the market conditions and to maintain a perfect balance on the
demand and supply position in the market. The distributor also has to carry
out occasional market surveys to find out their market position and to look
out for further potential markets.
49
PICTORIAL REPRESENTATION OF SUPPLY CHAIN:
50
PRODUCED
PRODUCT
BOTTLING
PLANT
DISTRIBUTOR
RETAILER
END CONSUMER
FLOWS IN PEPSI CO SUPPLY CHAIN:

51
1. PHYSICAL FLOW:
Suppliers
Transporters,
Warehouses
Manufacturer
Transporters,
Warehouses
Dealers
Transporter,
Warehouses
Retailers
2. TITLE FLOW:
Suppliers
Manufacturers
Dealers
Retailers
3. PAYMENT FLOW:
Suppliers
Banks
Manufacturers
Banks
Dealers
Retailers
4. INFORMATION FLOW:
Suppliers
Transporters,
Warehouses,
Banks
Manufacturer
Transporters,
Warehouses,
Banks
Dealers
Retailer
Customers
5. PROMOTION FLOW:
Suppliers
Advertising
Agency
Manufacturer
Advertising
Agency
Dealers
Advertisement
Agency
Retailers
7.11 RESEARCH DESIGN:
52
A research design is a framework or blueprint for conducting the

marketing research project. It details the procedures necessary for obtaining
the information needed to structure or solve marketing research problems.
Although a broad approach to the problem has already been developed, the
research design specifies the details of implementing that approach. A
research design will ensure that the marketing research project is conducted
effectively and efficiently.
The research design used in this analysis is of casual nature. Casual
Research is used to obtain evidence of cause-and-effect relationships. It is
used to understand which variables are the cause and which variables is the
effect of a phenomenon.
METHODS OF DATA COLLECTION:

There are different methods of collecting data. The basic sources of
collecting data are primary sources and secondary sources. Apart from these
datas been also collected through EDS (Every Dealer Survey).
PRIMARY DATA:
The primary data are the information which is collected for a specific
purpose of addressing the problem at hand. The primary datas were
collected from retailers and the dealers surveyed with the help of EDS
(Every Dealer Survey). Information was also collected through
questionnaire, direct questioning to the retailers and from salesman of Pepsi.
SECONDARY DATA:
The secondary data are the data that have already been collected for
purposes other than the problem at hand. These data can be easily located
and inexpensively. The sources of secondary data were journals,
newspapers, magazines, internet etc.
EDS (Every Dealer Survey):
53
EDS sheet is the one through which information is collected from the
market regarding the market regarding the market share of Pepsi with
respect to its competitors. It also helps in finding out various other vital
information regarding the condition of the inputs provided by the company
and the impact of the various sales promotion tools provided by the
company to increase sales. It helps to find out the present market situation
and gives an insight into the current market position. There are different
terms that are used in an EDS sheet, some of these terms are explained
below.
I. CATEG (Category of shops):
G- Grocery
C- Convenience
E- Eatery
II. STATUS (Status of shops):
P- Pepsi (shops which sold soft drinks of Pepsi only)
C- Coca Cola (shops which sold soft drinks of Coke only)
M- Mix (shops which sold soft drinks of both Pepsi & Coke)
III. CHILLING EQUIPMENT:
VISI- these are the coolers which are owned by the company and are
provided by the company to the retailers for sales promotion.
OYC- these are the coolers which are purchased by the retailers from
the company on payment and are privately owned.
OWN- these are the normal consumer coolers used by the shopkeepers
for commercial purpose.
IB- Ice Boxes provided by the company to the retailers.
IV. SIGNAGE:
54
G.S- Glow Sign board provided by the company.

W.P- Wall painting done by the company for advertisements.
COUNTER- Counter of the shop where company logo paintings are
found.
RACK- Racks provided by the company for display of products.
IN THE SHOP- The various posters and Pam plates found inside the
shop premise.
7.12 THE SAMPLING DESIGN PROCESS:

I. DEFINING THE TARGET POPULATION:
Sampling design begins by specifying the target population. The target
population is the collection of elements or objects that possess the
information sought by the researcher and about which inferences are to
be made.
The target population for the research project is defined as follows:
Elements- Shopkeepers mainly retailers who keep stock of soft drinks
of Pepsi or other brand.
Sampling units- Retail shops
Extent- Noida
Time- May 2007
II. DETERMINING THE SAMPLING FRAME:
A sampling frame is a representation of the elements of the target
population. The sampling frame used in this research is taken from the
EDS. Datas were taken from each and every retailers of Noida
regarding the sales pattern of Pepsi and amount of soft drinks sold in a
day.
III. SELECTION OF A SAMPLING TECHNIQUE:
55
The sampling technique used here is of Stratified Sampling. Stratified

sampling is a two step process in which the population is portioned into
sub-populations, or strata. Retailers are samples in this project and the
sample were collected from Noida region.
IV.DETERMINING THE SAMPLE SIZE:
Sample size refers to the number of elements to be included in the
study. Important qualitative factors that were considered in determining
the sample size include: (1) the importance of the decision, (2) the
nature of the research, (3) the number of variables, (4) the nature of the
analysis, (5) completion rates, and (6) resource constraints.
The sample size taken in this project is 793 retail shops, collected
from 16 routes of Noida region.
V. ANALYSIS OF DATA:
56
1. STATUS OF SHOPS:
PEPSI- 325
COCA COLA- 44
MIX- 424
PEPSI
41%
MIX
53%
COKE
6%
PEPSI
COKE
MIX
The status of shops in Noida according to datas collected through EDS was
that Pepsi came out as the market leader with 41% market share, shops
which were selling only Pepsi and Coca Cola came next with 6% of its share
in market. Whereas majority of the shops were found to be selling both
Pepsi & Coca Cola which came out to be 53%.
2. CATEGORY OF OUTLETS:
57
EATRY- 200
GROCERY- 293
CONVENIENCE- 288
INSTITUTE- 12
CONVENIENC
E
36%
INSTITUTE
2%
EATRY
25%
GRO CERY
37%
EATRY GRO CERY CO NVENIENCE INSTITUTE
The category of outlets that was found out according to the EDS done
was that out of 793 shops, majority were grocery shops which came at
37% next was convenience shops which came at 36% then came eatery at
25% and rest were institutes at 2%.
3. VOLUME (IN CRATES):
58
PEPSI- 515510
COCA COLA- 392360
600000
PEPSI, 515510
500000
COKE, 392360
400000
300000
200000
100000
0
PEPSI
COKE
PEPSI COKE
The volume was calculated in terms of number of crates of soft drinks sold
per day. The entire volume of the Noida region was found out to be 907870
crates, out of which Pepsis volume came out to be 515510 with 57% share
in total volume of the market and that of Coca Cola came at 392360 with
43% share in total volume.
4. VOLUME IN TERMS OF CATEGORIES:
59
1) EATERY
PEPSI- 165855
COCA COLA- 120229
180 000
PEPSI, 165 855
160 000
CO KE, 12 0229
140 000
120 000
100 000
8 0000
6 0000
4 0000
2 0000
0
PEPSI
C O KE
PEPSI CO KE
The total volume of Pepsi in eatery came out to be 286084, out of which
Pepsis share came out to be 165855 i.e. 58% & that of Coca Cola came
at 120229 i.e. 42% of total volume sold in eatery.
2) GROCERY:
60
PEPSI- 204284
COCA COLA- 138360
25 0000
PEPSI, 204284
20 0000
CO KE, 138360
15 0000
10 0000
50000
0
PEPSI
CO KE
PEPSI CO KE
The total volume of Pepsi in grocery came out to be 342644, out of which
Pepsis share came out to be 204284 i.e. 60% & that of Coca Cola came at
138360 i.e. 40% of total volume sold in grocery.
3) CONVENIENCE:
61
PEPSI- 119332
COCA COLA- 132971
C O KE, 1 3 2 9 7 1
135000
130000
125000
PEPSI, 1 1 9 3 3 2
120000
115000
110000
PEPSI
CO KE
PEPSI C O KE
The total volume of Pepsi in convenience came out to be 252303, out of

which Pepsis share came out to be 119332 i.e. 47% & that of Coca Cola
came at 132971 i.e. 53% of total volume sold in convenience.
4) INSTITUTE:
62
PEPSI: 26039
COCA COLA: 800
3 0 00 0
PEPSI, 2 60 3 9
2 5 00 0
2 0 00 0
1 5 00 0
1 0 00 0
5 00 0
C O KE, 8 00
0
PEPSI
C O KE
PEPSI C O KE
The total volume of Pepsi in institute came out to be 26839, out of which
Pepsis share came out to be 26039 i.e. 97% & that of Coca Cola came at
800 i.e. 3% of total volume sold in institutes.
5. CHILLING EQUIPMENT:
63
VISI: 382
OYC: 47
OWN: 359
I.B: 248
I. B
24%
V IS I
36%
OW N
35%
OYC
5%
V IS I O Y C O W N I.B
The Pie chart shows the percentage of chilling equipments found in 793
retail shops of Noida, in which VISI coolers share in total was 36% to that of
OWN coolers is 35% while of I.B (ice boxes) was 24% and the rest were
OYC which came at 5%.
1) NUMBER OF VISI COOLER:
64
PEPSI- 215
COCA COLA- 167
COKE
44%
PEPSI
56%
PEPSI
COKE
The number of VISI coolers that was found out of 793 shops were 382, out
of which Pepsi has 215, 56% of the total VISI coolers in shops and Coca
Cola has 167, 44% of the total VISI coolers found in shops.
2) OYC COOLERS:
65
PEPSI: 37
COCA COLA: 10
COKE
21%
PEP SI
79%
PE PSI COKE
The number of OYC coolers that was found out of 793 shops were 47, out of
which Pepsi has 37, 79% of the total OYC coolers in shops and Coca Cola
has 10, 21% of the total OYC coolers found in shops.
3) ICE BOX:
66
PEPSI: 196
COCA COLA: 52
COKE
21%
PEPSI
79%
PEPSI COKE
The number of ICE BOXES that was found in 793 shops were 248, out of
which Pepsi has 196, 79% of the total ICE BOXES in shops and Coca Cola
has 52, 21% of the total ICE BOXES found in shops.
6. SIGNAGE:
67
GS: 48
DPS: 78
W.P: 38
COUNTER: 44
RACK: 87
IN THE SHOP: 58
IN TH E S H O P
16%
GS
14%
DPS
22%
RACK
25%
C O U N TE R
12%
WP
11%
G S D P S W P C O U N TE RR A C K IN TH E S H O P
The Pie chart shows the percentage of signage found in 793 retail shops of
Noida, in which GS (glow signs) share in total was 14% to that of DPS is
22% while of W.P (wall painting) was 11%, COUNTER came at 12%,
RACK came at 25% and signage inside the shop were 16%.
1) G.S (GLOW SIGN):
68
PEPSI: 43
COCA COLA: 5
COKE
10%
PEPSI
90%
PEPSI
COKE
The number of G.S that was found in 793 shops were 48, out of which Pepsi
has 43, 90% of the total G.S in shops and Coca Cola has 5, 10% of the total
G.S found in shops.
2) DPS:
69
PEPSI: 67
COCA COLA: 11
COKE
14%
PEPSI
86%
PEPSI
COKE
The number of DPS that was found in 793 shops was 78, out of which Pepsi
has 67, 86% of the total DPS in shops and Coca Cola has 11, 14% of the
total DPS found in shops.
3) W.P (WALL PAINTING):
70
PEPSI: 36
COCA COLA: 2
COKE
5%
PE PSI
95%
PEPS I COKE
The number of wall painting that was found in 793 shops was 38, out of
which Pepsi has 36, 95% of the total wall paintings in shops and Coca Cola
has 2, 5% of the total wall paintings found in shops.
4) COUNTER:
71
PEPSI: 41
COCA COLA: 3
COKE
7%
PEPSI
93%
PEPSI COKE
The number of counters that was found in 793 shops was 44, out of which
Pepsi has 41, 93% of the total counters in shops and Coca Cola has 3, 7% of
the total counters found in shops.
5) RACK:
72
PEPSI: 65
COCA COLA: 22
COKE
25%
PEPSI
75%
PEPSI COKE
The number of racks that was found in 793 shops was 87, out of which Pepsi
has 65, 75% of the total racks in shops and Coca Cola has 22, 25% of the
total racks found in shops.
6) SIGNAGE INSIDE THE SHOP:
73
PEPSI: 52
COCA COLA: 6
COKE
10%
PEPSI
90%
PEPSI
COKE
The number of signage inside the shop out of 793 shops was 58, out of
which Pepsi has 52, 90% of the total signage inside shops and Coca Cola has
6, 10% of the total signage found inside the shops.
7.13 SWOT ANALYSIS:
74
STRENGTS
A MULTI NATIONAL COMPANY
GOOD BRAND RECOGNITION

STRONG MARKETING STRATEGY
STRONG ADVERTISING CAMPAIGN
GOOD REACH TO MARKET
ABILITY TO PROVIDE GOOD SALES PROMOTION SCHEMES
WEAKNESS
NON AVAILABILITY OF ALL PRODUCTS
POOR AFTER SALES SERVICE

INEFFICIENT ROUTE SALES AGENT
POOR DISTRIBUTION OF SCHEMES
PROMISES ARE NOT FULFILLED
LACK OF REFRIGERATING ASSETS DURING SUMMER
SEASON
OPPORTUNITIES
SCOPE FOR GROWTH IN THE MARKET
PEPSI SHARE IN TOTAL VOLUME OF MARKET IS 57% THERE
IS STILL A LARGE MARKET FOR IT TO CAPTURE
THERE IS A HUGE RURAL MARKET TO BE EXPLORED BY
PEPSI
THREATS
COCA COLA COMING INTO THE MARKET WITH
AGGRESSIVE MARKETING STRATEGY.
PEPSI LOOSING OUT TO COCA COLA ESPECIALLY IN THE
URBAN MARKET.
AVAILABILITY OF SWADESHI SUBSTITUTES IN THE
MARKET.
PEOPLE CHANGING ON TO FRUIT DRINKS BECAUSE OF
FEAR OF PESTICIDES IN CARBONATED SOFT DRINKS.
8. FINDINGS:
75
DEFICIENCIES IN SUPPLY CHAIN OF PEPSI:

1. PROBLEM FACED BY THE DISTRIBUTOR:
There is a great chance of damage in the product because of two
reasons (a) the goods are transferred from a long distance. (b) the
plastic bottles are more prone to damages during the summer season
because of the heat conditions.
Damaged materials are not easily returned by the company people and
it takes almost three months to get the damaged goods returned with
the settlement of bill. Therefore a large amount of capital gets blocked
and it creates disturbance in the distribution channel.
Less motivated work force of distribution channel, the sales person
are not motivated enough to bring maximum sales during the day.
Most of the retailers were found keeping other products in the
company owned coolers like Ice creams, milk, chocolates etc. this
results in less storage in coolers and non availability of sufficiently
chilled soft drinks for the consumers.
The retailers are not conscious enough to get the service & repairment
of their cooling equipments done regularly, which resulted in frequent
complains of cooling equipments getting out of order.
2. PROBLEM FACED BY THE RETAILERS:
Negligence made by the distributor: if the workforce of the distributor

makes any kind of mistake in order taking and fulfillment of the order,
the consequences are faced by the retailer.
The sales person of the distributor are not honest while distributing
schemes to the retailers, therefore often the retailer gets part of the
scheme or remains unaware of the schemes.
The sales people are less efficient in supplying goods to the retailers
and are also negligent in keeping the cooling equipment especially the
VISI coolers pure. Therefore the cooling equipments are often found
to be stocked with rival brands which lower the sale of company
products.
The company is less efficient in replacing the old and damaged
coolers with new ones, which causes problem for the retailers.
9. CONCLUSION AND RECOMMENDATIONS:

76
9.1 CONCLUSION:
During my stay in the organisation as Summer Trainee I discovered a few
discrepancies in the market, which have been mentioned earlier. Some of the
conclusions drawn from my study during my stay are mentioned as follows:
Lack of proper schemes has been a major reason behind the
unfavorable response at some of the outlets. On the other hand Coca

Cola had been quite active in this regard and gave attractive schemes
in this season. Although the schemes provided by Pepsi were found
better than that Coca Cola but the major reason for Pepsi lacking
behind was inefficient distribution of the schemes to the retail outlets.
It has been found that quite often then not the schemes provided by
the distributor do not reach the intended customers. Most often the
outlet owners do not give these schemes (gifts) to the customers. This
calls for strict vigilance by the higher authority to make sure that the
schemes reach to the customer.
The route agent seems to be indifferent to his route sales and also
towards the retailer problems. Most of them were in the habit of

taking leaves frequently which resulted in loss of route sales and were
not motivated enough to increase his route sales and seems to be
harried a lot.
Most of the vehicles were not in proper working condition and also
most of the sales people are not provided with basic utility tools for
unloading and supply of stock.
It has been seen that most of the shop keepers were not satisfied with
the service provided by Pepsi sales man also there was large amount
of dissatisfaction among the shop keepers regarding the cooling
equipments provided by the company. Coca Cola was found to be
functioning well especially in the urban markets with their aggressive
sales promotion schemes and most shopkeepers were satisfied with
their products.
9.2 RECOMMENDATION:
77
Following are some of the recommendations put forwarded which may be of

use for the organisation:
The supply chain should be checked regularly by the higher
employees so that the deficiencies can be known and proper actions
should be taken to remove the same.
Care should be taken by the distributor that the schemes provided for
the retailers are available to them without any distortion and that the
problems faced by them are sorted out quickly by the sales executive.
The distributor should try to solve the problems faced by the retailers
with respect to the chilling equipment provided by the company,
especially during the peak summer season which causes a huge
problem for the retailers to keeps the soft drinks chilled.
The distributor should keep a routine check on the distribution of sales
generating assets to the retailers and look for proper display of its
products in the shops.
Attractive incentive schemes for the route agents to increase the route
sales should be taken into consideration. This will help reduce
absenteeism among the route agents and will also help increasing
sales of the depot.
It has been seen that most of the gifts which come out of lucky draw
or schemes doesnt reach the customers in time. Care should be taken
that these gifts reach in proper condition and in time to the customers
who will help create goodwill of the company.
Rural area and villages should be targeted properly and it should be
seen that all the products and schemes that are provided by the depot
are reaching to the ultimate consumers.
There has always been a complain from the retailers that all the
flavors and the products does not reach them as and when wanted by
them, in this regard the sales person should be efficient in catering to
the market needs and help satisfying the demand of the retailers.
10. LIMITATIONS:
78
The research findings are based on the 793 retail shops visited, which
belongs to Noida region only.

The time taken to complete the research work was two months from
the month of May to June, when the sales are at peak and hence the
datas can fluctuate.
Some of the datas provided by the retailers may not be authentic as
they had low level of interest on companys research work.
Some of the retailers were providing wrong data by over quoting their
sales as they wanted to create good impression in front of the
distributor.
The research work is the outcome of the help from other persons also
working in the organisation which are subjected to human error.
11. BIBLIOGRAPHY/REFERENCE:
79
BOOKS REFERED:
1. Marketing Research- An Applied Orientation,
By Naresh K. Malhotra.
2. Consumer BehaviorBy Leon G. Schiffman & Leslie Lazar Kanuk
3. Marketing ManagementBy Philip Kotler.
WEBSITES:
www.pepsiworld.com
www.pepsico.com
www.rkjgroup.com
www.pepsiindia.co.in
www.wikipedia.com
80

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For the success of this project my profound

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7.11 Research Design-----------------------------------------------------------49

competitor attractive schemes are launched to increase demand for goods

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5. OBJECTIVE OF THE STUDY

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Glow Sign Board

5. Average daily peak sales (in crates):

6.2 METHODOLOGY FOR ANALYSING SUPPLY CHAIN:

Information regarding the retailers was also collected through

Frito-Lay, Inc. - Fritos brand corn chips (created by Elmer Doolin in

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PepsiCo sales pass the $2 billion mark.

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PepsiCo Food Service International (PFSI) is formed to focus on

INSTITUTE OF MARKETING & MANAGEMENT

the most eagerly-awaited television commercials featuring music

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Pepsi-Cola forms joint venture with Thomas J. Lipton Co. to develop

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PepsiCo sales reach $30.4 billion. There are 470,000 employees

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Pepsi-Cola kicks off the celebration of its 1998 100th Anniversary

Pepsi-Cola launches "Sierra Mist" a caffeine-free, lemon/lime soda.

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Tropicana launches Tropicana Healthy Heart with Omega-3s, the first

7.2 PEPSI CO OVERVIEW:

The company consists of Frito-Lay North America, PepsiCo Beverages

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At PepsiCo, it believes that as a corporate citizen, it has a responsibility

7.3 PEPSI CO. INDIA:

PEPSI CO. INDIA PRODUCTS:

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PepsiCo Indias expansive portfolio includes iconic refreshment

PepsiCos snack food company, Frito-Lay, is the leader in the branded

7.4 ABOUT RKJ GROUP:

It can be said with absolute certainty that the RKJ Group

VARUN BEVERAGES LTD:

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BUSINESS SEGMENTS OF RKJ GROUP:

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It has the license to supply beverages in the territories of Western U.P.,

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7.5 CARBONATED SOFT DRINK INDUSTRY:

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PURCHASE AND CONSUMPTION PATTERN:

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7.6 MARKETING MIX:

Two types: single serve and multi serve

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10. PEPSI DIET

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7.7 OPERATIONAL STRUCTURE OF MARKETING