This action might not be possible to undo. Are you sure you want to continue?
Chapter No. Chapter No-1 INTRODUCTION 1.1 Introduction 1.2 Need for the Study 1.3 Objective of the Study 1.4 Methodology 1.5 Limitations Chapter No-2 PEPSI COMPANY OVERVIEW 2.1 Genesis and Growth 2.2 Organization Structure 2.3 Production Function 2.4 HR Function 2.5 Finance Function 2.6 Marketing Function 2.7 Future Function Chapter No-3 DATA ANALYSIS AND INTERPRETATION 3.1 Introduction 3.2 Details of the survey conducted 71 Chapter No-4 SUMMARY AND SUGGESTIONS 4.1 Summary 4.2 Findings 4.3 Suggestions 4.4 Conclusion APPENDIX BIBLIOGRAPHY 72 75 77 79 81 85 Title Page No 2 3 7 8 9 11 12 13 23 25 38 41 44 48 49 50 51
Today many new companies are coming in to existence and because of this the competition is also growing rapidly. Because of this reason they have to compete with their competitors constantly. In some industries the new companies may not come in to existence but the competition between the existing companies is growing more and more. The soft drink industry is mainly suffering with this particular problem. The Companies have to continuously compete with their competitors to get good market share and good profits. To face their competitors they have to know their position and the competitor’s position in the market. For this, the Company’s will compare itself with their competitor that means they will do the comparative analysis in all aspects. “Item by Item comparison of two or more comparable alternatives, processes, products, qualifications, set of data and systems etc. in accounting for, for example changes in a financial statement’s items over several accounting period may be presented together to detect the emerging trends in the firm’s operations and results”. ----- Business Dectionary.com From this we can understand that Comparative analysis means the comparison between the similar things (products, place, technologies, living beings and etc.) regarding the features, nature, functions, behavior, SWOT, and many other characters is called Comparative analysis. In this comparative analysis the researcher will take any two or more similar products (that means the functioning of the products are almost same) and compare the common and the similar features of the products to find out that which product is the best one. In comparative analysis the Company will compare itself with the company which is in the top position in that industry or which is top in the position in that particular area or region; from this they can understand their position in that industry. It will be very useful know what is the strength and weakness of the Company and the company will try rectify the problems in order to increase their performance to reach and to beat out that other Company with whom they are comparing their Company. In the present scenario in the soft drink industry, the two gaint companies are fighting with each other. They are adopting and changing the strategies
frequently. They are changing their schemes and offers according to their competitors. They have to analyse their competitor’s strategies and techniques comparing with their company’s strategies and techniques. The study on comparative Analysis of Pepsi and Coke is very useful to Pepsi Company. The comparison is done on all aspects of the Company. From this analysis the company can know their position in the soft drinks market. Through this Analysis Pepsi Company can know the merits and demerits of the Company comparing with Coke Company. There are two famous beverage companies, Coke and Pepsi, have been competing dramatically and distributed the beverage market profit for several decades. In the free market, it is hard to exactly tell which one is the winner within the perfect competition, because both companies using the different styles of commercials and products to expand their markets. Personally I believe that Pepsi earned higher profit than Coke because Pepsi has better marketing strategies and the representative for its commercials and T.V Ads cost is lowers. I choose Pepsi over Coke because Pepsi has fair marketing strategy that attracts all generation of people of all ages, whereas Coke targets mostly younger generation and tries to make an image of Pepsi as a UN cool drink, and Pepsi has made more People made more people to appreciate its value and product than Coke. Therefore, we should drink Pepsi that knows how to appreciate all audiences of all ages, regardless of their ages and genders. It is interesting to here that Pepsi won the Taste test over Coke in the world wide. This is the good sign for the company to get good market share. More people voted for Pepsi’s taste than Coke’s taste. Coke Company blames that all these taste tests meaningless and not the proper ones to decide the taste and the greatness of the soft drinks. The production cost of Pepsi Company is less than Coke because Pepsi Company is using the Franchisees for the production purpose and giving the remuneration for the production and maintaining the quality of the products by the regular checkups. In case of Coke it has its own production units and producing the products in their own plants, this increases the production cost of the drinks of Coke, because of this reason the profits of Coke reduced when compared to Pepsi. When we compare the commercial Ads of the two companies, Pepsi and Coke there is a major thing that we can pick up from them, which is the representative of their products. In other words who are the representatives in both commercial Ads?
The companies try to establish an image to the public is that their brands are closely related to our environment and culture in which we are living. This is the main secret of the Ads of the Soft Drinks. Sometimes they directly hit the egos of the customers and to satisfy their ego they will show the solution, that is the product of the company. This should be taken care by the Advertising department. For this reason they will use different locations of the country and different cultures of the country and different religions of the country in their Advertisements. They mean to say is we are close to your lives. This comparative analysis is totally done on the retailer’s opinion that means this comparative analysis is also helpful to know the belief and faith of the retailers on Pepsi Company. The total data for the study was collected based on the comparison between the two Companies, Pepsi and Coke. From this Pepsi Company can get the positive and negative points of their Company comparatively with Coke Company. During this study some retailers gave some suggestions to improve the quality of the service (supply) and the image of the Company in the market and some people gave some complaints on the dealers of the company that they are not providing the sufficient information about the offers, service and the other things regarding the company. The company can use these suggestions for its improvement and by considering the complaints they can rectify the problems that they are facing from the company or the company dealers. The Company can not go for the survey on every area to know the position of their products, hence through this comparative analysis the Company can get the information about the position of the Company in that area along with the position of the rival Company in that particular area. In this study the comparison was done in the case of Advertising of the Company’s, the manner they are attracting the customers, the differences in the production functions and etc. were done. From all these comparisons Pepsi Company can know the differences between the Pepsi Company and its competitor Coke Company. Without comparing one Company with another company which is in the same industry they can not know their position in that particular industry. The Company can know that how many retailers are selling their products individually and how many retailers are selling the Pepsi products along with other products in their retail stores. The Company is providing the Visi Coolers to the retailers to store the Pepsi Company products. Through this study the Company got the information that how much percentage of the retailers are using the Pepsi
Coolers and how much percentage of the retailers are using Coke Company’s Coolers and their own Coolers. From this information the Company can take the decision to increase the usage of the Pepsi Visi Coolers at the retail stores. In this manner the study on Comparative analysis of Pepsi and Coke is Very much important and helpful to the Company. Because of this reason only the investigator did his project work on this particular topic with reference to Pearl Bottling Company Pvt. Ltd., Visakhapatnam.
1.2 NEED FOR THE STUDY
In the present scenario the competitions between the soft drinks increased very high. The companies are struggling a lot to keep up their market share in the industry and to improve the sales of their products i.e. the turnover of the company. For this the company has to know their position in the market and the opinion and the loyalty of the customers and the retailers when compared to their competitor. Because of this reason the comparative analysis is very important and useful to the Company. By the use of comparative analysis the companies can understand the position of the company and the strength of the company in the market. Through the comparative analysis we can understand that what strategies the competitors are using for the increase their sales volume. From the study we can gather the information regarding the opinion of the retailers on the companies comparatively and this will help to plans for the future to increase the performance of the company and to gain the loyalty of the retailers when compared to the competitors. Through this study the investigator got the personal experience in the market field. He can implement his theoretical knowledge in to practice. He can know how the companies are competing with each other to sustain in the market in this tough competitive world. Hence I felt that there is a need for the study. However, this type of study has not been carried out earlier by any investigator.
1.3 OBJECTIVES OF THE STUDY
1. To study the overview of Pepsi Company (Pearl Bottling Pvt. Ltd.). 7
2. To know and compare the merchandising of Pepsi and Coke in retail
outlets. 3. To identify the retailers opinion towards Pepsi products when compared to coke products. 4. To offer some finding and suggestions to the company for the improvement of its performance.
Data which is required for this study is based on both primary and secondary data.
Primary data is collected from the retailers through a structured questionnaire. It includes the first hand information from the outlets. It can view as a survey. The questionnaire was especially designed to find out the market share of Pepsi and Coke Companies comparatively in these clusters. Through this information we can get the strengths and weaknesses of Pepsi and Coke Companies in those particular clusters. The total primary data was collected from the following clusters. Srikakulam Narasannapeta Amadalavalasa Investigator started the survey first at Srikakulam on 4/02/09 and completed on 24/02/09 with Amadalavalasa. Investigator personally went to every outlet and asked the total details, which are in the questionnaire and filled those questionnaires. Some of the retailers denied giving the details, then the investigator waited there with patience and collected all the data from that retailers. In the survey the investigator learned a lot and collected the useful information and also got good experience in the market field and came to know many things which are not in our books through this survey. The investigator almost covered all the retail outlets which are situated in these three clusters and collected the correct information.
Secondary sources include the information collected from the annual reports, published and unpublished records of the company .various books and journals were referred. Internet was also being used for collecting the relevant data which is not available in the books. Some of the websites are:
WWW.pepsiindia.co.in WWW.pepsico.com WWW.indiainfoline.com
After gathering the data from those two sources the data was analyzed and the important information was extracted for the use of study.
Data Analyzing Tools:
After gathering the data from the Primary and secondary sources the data were tabulated using a structured format, was analysed using some calculations to sum up the total information. The resultant data has been used in tabular format to prepare the graphical representations. After the graphical representation the interpretation was done to each and every graph using the Microsoft word and Microsoft Excel. Interpretation is the total essence of the total study. The conclusions were made using the interpretations.
1.6 LIMITATIONS OF THE STUDY
The study has the following limitations:
1. Time allocated for the study is one month which is not sufficient for in-depth
2. Unavailability of some information due to the lack of awareness of retailers in
these clusters. 3. Bias in the information provided by the retailers.
2.1GENESIS AND GROWTH
PepsiCo is a world leader in convenient foods and beverages, with the revenue of $307.2 millions by 2004 and $367.1 millions by 2009 with 163,000 employees. The company consists of Frito-Lay North America, PepsiCo Beverages North America, PepsiCo International and Quaker Foods North America. "Pepsi cola" was started in 1898 by “Caleb Bradham”. This was the second company introduced in soft drinks field. The pioneered company was “Coca-Cola” which was started in 1886 in Atlanta by Dr. John S. PepsiCo is 44 years old company. It was formed by the merge of Pepsi Cola and Frito-Lay in 1965. Tropicana was acquire in 1998, and PepsiCo company merged with the Quaker Oats Company Pepsi entered India in 1956 and left in 1961 because the products were not acceptable in Indian in those days. Pepsi reentered India in 1990 and with in 7 years it captured good market share in India. Now PepsiCo brands are available in more than 200 countries in the world. The world’s headquarters of PepsiCo is situated in New York, USA. It occupies 144 acres in the city. The headquarters of India is situated in Mumbai. Indra Nooyi took the charges as CEO of PepsiCo in Oct 1, 1996 and she got the Outstanding American by Choice Award. She is leading the organization very successfully and she was named in the top and powerful women in the world. Now the market share of PepsiCo in India is 53% and the remaining was caught by its tough competitor Coca-Cola. These companies are the major competitors to each other. Today the consumption of soft drinks is more than water in America. More than 5,560 million liters of carbonated soft drinks are consumed every year in USA, this refers that the consumption of soft drinks is more than water in America. In 1969, Pepsi Company introduced the modern red & white modern packing technology to make the packs attractive. In the same year Frito-Lay introduced fungus brand onion flavoured snacks in to the market. In 1970, Pepsi introduced the industry’s first two liter bottles. Pepsi is the first company to respond to consumer preference with light weight, recyclable plastic bottles used for drinks. In 1971, Andral E.Pearson is appointed as the president of PepsiCo and he was in that position up to his retirement 1984.
In 1972, Don Kendrall announces agreement making that PepsiCo was the first foreign product sold in U.S.S.R. is given the exclusive rights to improve the sales of Stolichnaya Russian Vodka in U.S. In 1973 & 74, PepsiCo became the first American product to be produced and sold in former Soviet Union. In 1975, Pepsi lite, with destructive lemon taste is introduced as an alternative to traditional diet kolas. In 1776, PepsiCo adopts the worldwide business code of conduct. PepsiCo became the single largest selling soft drink brand sold in U.S super markets. In 1979, PepsiCo started its reach and technology center in Vallah, New York, USA. This increased sales of the company. In this year they introduced 12 packs cans. In 1980 & 81, in these years PepsiCo food service international was formed to focus on overseas development of restaurants, and fitness centers for the health development of the employees of the company. In 1982, PepsiCo introduced the caffeine free colas, first time in to the market. In 1983, the bottler hall of fame is established to recognize the achievement and dedication of international bottlers. In 1984, Diet Pepsi was reformulated with 100%natural sweet, slice and diet slice are also introduced in to the market. The “space cans” were introduced in to the market successfully. In 1986, the largest North American transportation company “North America Van Lines (NAVL) was merged with Pepsi to improve the distribution channels of the company. The second plant was started in China. In 1987, the new headquarters of PepsiCo was moved to New York, USA. In 1988, PepsiCo is recognized along graphical lines East, West, South and central regions, each with its own president and senior management staff. In 1989, Pepsi Company introduced share power stock option program for all employees becoming the first large corporation tool award stock options through virtually all full time employees. In 1990, Pepsi Company was named as one of the most admired corporations by the fortune magazine’s top 10 for the two successive years. Pepsi reentered in India with the collaboration with “Punjab Agro Industries Corporation (PAIC)”.
In 1991, Pepsi Company was named as one of the most admired corporations by the fortune magazine’s top 10 for the third year also. In 1993, PepsiCo started its distribution of Lipton’s line of ready to dink tea national wide. PepsiCo introduced Pepsi max, a soft drink with unique blend of sweeteners that delivers maximum cola taste in a no sugar product. In 1994, Pepsi introduced Aquafina bottled water into test market and got great success. In 1995, Pepsi Company introduced 7up ice cola in to its product line. In the same year Lay’s brand potato chips were launched in 20 markets of the world. In 1996, Pepsi Company started its website WWW.pepsi.com and it started its operations throughout the world. In 1997, Pepsi Company announced plans to spin off its restaurants business as an independent publicly traded company and sold its food distribution company to focus on its core beverages and snack food business. In 1998, Pepsi Cola celebrates 100th anniversary with first world wide Bottlers conference held in Hawaii, the event is held during the same time as first Bottlers conference. Pepsi Company introduced 2lit bottles in to the market. In 1999, Aquafina became official beverage sponsor of all American Soccor Stars victory tour. Sprite was introduced in to the market and got success. In 2000, Pepsi Company launched new beverages line of fruit drinks like Apple, strawberry, peach papaya, pink lemonade, and strawberry melon grime citrus. In 2001, Pepsi Company announced a new joint venture in Egypt combining the salt snack operations of chip, the current market leader and tasty foods, which is owned by Pepsi Company.
MILESTONES OF PEPSI
2000-2008 Milestones: 15
Pepsi- Cola revives its “Pepsi Challenge” advertising campaign. Challenge includes Pepsi One and Diet Coke as well as well as regular cola. Pepsi –Cola team up with yahoo Inc., the biggest web navigation company, in a multimedia marketing campaign aimed at teens and young adults. Tropicana, in a joint venture with Galaxy Foods Co., introduced an icy smoothie soy milk-and-fruit drink, made with juice, fruit puree along with soymilk and soy protein. Aquafina brand bottled water became the best-selling brand of single-serve bottled water in US retail channels. Pepsistuff.com, a website for merchandise, discounts and digital music files form biggest names in movies, music, video games. Apparel and sports is launched in joint promotional with Yahoo.
Pepsi-Cola Company launched Dole single-serve juices in vending machines, coolers and other retail outlets throughout the United States. Pepsi-Cola’s flagship brand had the new tagline, “The joy Of Pepsi”. Tropicana celebrated a company milestone of 300 billion fresh an orange squeezed since the company began making country’s first ever mass distributed, notfrom-concentrate juice in1947. Pepsi-Cola launches the bold new Mountain Dew Code Red nationwide in United Sates. Tropicana introduced smoothies. A natural juice-based product, smoothies combine fruit juices and non-fat yogurt into a smooth, filling drink that delivers nutrition, taste and convenience. Frito-Lay introduces Lay's Bistro Gourmet potato chips. Pepsi-Cola Company introduces a "Pepsi Twist." Regular and diet versions of the crisp new cola with lemon are entering retail outlets in selected U.S. markets. SLAM, the orange brand Mirinda, is launched in Italy. On August 2, PepsiCo merges with The Quaker Oats Company, creating a $25 billion food and Beverage Company focused on the rapidly growing consumer demand for convenience.
Aquafina debuts new line of great-tasting enhanced waters. Aquafina Essentials target active, health-conscious adults in four lightly sweetened varieties including B-Power, Calcium+, Daily C and Multi-V in 20-oz. bottles. Gatorade introduced new Gatorade ICE in three flavors- Orange, Lime and Strawberry. Tropicana Pure Premium announced sponsorship of Disney's award-winning show The Lion King. Tropicana® Pure Premium® introduces 14-oz. single-serve resalable bottle you can take with you for the on-the-go- consumers. Diet Pepsi has a new look. "Mr. Green," a green-tinted carbonated soft drink with caffeine and ginseng, is launched under SoBe's New Age beverage line in April. Aquafina debuts new line of great-tasting enhanced waters. Aquafina Essentials target active, health-conscious adults in four lightly sweetened varieties including B-Power, Calcium+, Daily C and Multi-V in 20-oz. bottles. PepsiCo published Health and Wellness Philosophy. Frito-Lay announces plans to introduce Lay's Reduced Fat chips and Cheetos Reduced Fat snacks. Brand Pepsi has a new look. Tropicana introduces a new campaign with the tag line "So pure. So alive. Tropicana Pure Premium." PepsiCo introduced Marathon Kids, a program that encourages kids and their families to be more physically active and it got huge success throughout the world.
Pepsi-Cola launches Sierra Mist nationally. PepsiCo launches "Get Active/Stay Active" program. Quaker Chewy introduces Quaker Chewy Wholesome Favorites and Quaker Chewy Trail Mix. Gatorade unveils In-Car Hydration System for NASCAR Drivers.
SoBe sponsors U.S. Open Snowboarding Championships. Pepsi announces plans to launch Mt. Dew Livewire, an orange drink, this summer. 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. Frito-Lay announces new line of snacks made with organic ingredients called "Natural Snacks." 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. Pepsi–Cola trademark turned 100 years old. Pepsi Vanilla is launched in the United States. Tropicana introduced Tropicana 100% Juice Blends.
PepsiCo Launches 'Health Roads' Wellness Benefit for Associates and Their Families PepsiCo's new "Smart Spot" program is featured as an example of the food industry's focus on health and wellness in today's edition of USA Today. Frito-Lay Launches Doritos and Cheetos Halloween Treat Multi-Sacks. Frito-Lay's 24-count Multi-Sack variety pack won the Institute of Packaging Professional's (IOPP) Integrity Award, one of the industry's top awards, at this year's AmeriStar Packaging Awards. Frito-Lay Introduces Doritos Black Pepper Jack Diet Sierra Mist Become Sierra Mist Free Pepsi-Cola to launch Pepsi Edge, the first full-flavored cola with 50% less sugar, carbohydrates and calories than regular cola.
Pepsi Bottling Group (PBG) – PepsiCo's biggest bottler bought Phil Gaudreault ET
Fils Ltee, a Quebec-based Pepsi bottle.
2005 Milestones: 18
PepsiCo Celebrates 40th Anniversary. PepsiCo launched Quaker Milk Chillers. Tropicana Launched All Fruit Smoothies. Frito-Lay Launches Quaker Oats in India Pepsi Foods Introduced Weight Control Instant Oatmeal Pepsi Lime and Diet Pepsi Lime Launch Tropicana Twister Soda Launched in April PepsiCo international and Lipton came into agreement and introduced new Lipton Original Iced Tea and New Lipton Iced Tea. Tropicana Fruit Wise Campaign Launched. PepsiCo Health & Wellness Launches Everyday Smart Moves Magazine. Pepsi Celebrates 20th Consecutive Super Bowl With New Diet Pepsi Campaign. 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. Frito-Lay announces the launch of a new line of snack chips called Lay's Sensations and Tostitos Sensations.
Frito-Lay launches Tostitos Multigrain; new snack brings flavor of four wholesome grains to one of America's favorite tortilla chips. 2006 Milestones:
• • • • •
Quaker Snacks Unveils Breakfast Cookies Doritos unveils new packaging, including an updated logo PepsiCo Launches Pepsi Limon in Peru PepsiCo Completes Acquisition of Stacy's Pita Chip Company PepsiCo Foodservice Partners With Cracker Barrel to Serve Up Fritos-Branded Menu Item PepsiCo Foodservice Pours Two New Account Wins: Famous Dave's of America and Roundtable Pizza Pepsi Celebrates 20th Consecutive Super Bowl With New Diet Pepsi Campaign North American Coffee Partnership Launches New Starbucks Beverages, Starbucks Iced Coffee, Starbucks Iced Coffee Light as well as Strawberries and Creme Frappuccino and Starbucks Double shot Light
• • •
PepsiCo India re-launches Mirinda SoBe Launches New SoBe Life Water Cheetos kicks off the biggest marketing campaign in its history with "Undercover Chester," an integrated communications platform that asks consumers to help Chester Cheetah recover the stolen recipe for Cheetos 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. Frito-Lay announces the launch of a new line of snack chips called Lay's Sensations and Tostitos Sensations Frito-Lay launches Tostitos Multigrain; new snack brings flavor of four wholesome grains to one of America's favorite tortilla chips. Lay's Introduces Hot 'n Spicy KC Masterpiece BBQ Potato Chips. Frito-Lay cuts saturated fat in Lay's more than 50% for the health of the consumers. Diet Pepsi launches Jazz, a new line of zero-calorie colas available in rich flavors like Black Cherry French Vanilla and Strawberries & Cream. Tropicana debuts Tropicana Pure--a new line of 100% premium juices Indra Nooyi named Chief Executive Officer of PepsiCo as of October 1, 2006 Frito-Lay kicks of its nationwide rollout of Lay's with 100% Pure Sunflower Oil
• • • •
PepsiCo announces it will acquire New Zealand snack company Bluebird Foods
• • PepsiCo signs Maria Sharapova for International endorsement of Gatorade and Tropicana. PepsiCo announces new Diversity & Inclusion Leadership Award inspired by Steve Reinemund.
Aquafina launches Aquafina Alive—a low calorie, vitamin-enhanced water beverage. Fritos Corn Chips celebrates 75th Anniversary with retro packaging.
Tropicana launches Tropicana Fruit Squeeze, a 20-calorie drink with real Tropicana fruit juice. Lay's launches 'Share the Joy' program to help the Make a Wish Foundation raise funds. 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. Indra Nooyi receives the Outstanding American by Choice Award. PepsiCo makes Fortune magazine's '100 Best MBA Employers' list. Indra Nooyi named as 2007 Working Mother 'Best Company for Multicultural Women'. PepsiCo wins two awards –Best Environmental/Wildlife Campaign and Best Cause Marketing Event -- at Fifth Annual Cause Marketing Halo Awards. Pepsi wins Webby Award for its execution of the "Best Sports Website"
• • • • • •
PepsiCo earns spot in Black Enterprise Magazine's '40 Best Companies for Diversity'.
PepsiCo Foundation announces two major new grants to Water Partners and Safe Water Network programs to provide access to safe water and sanitation in developing countries. Forbes Names PepsiCo among Its Best Big Companies. PepsiCo India Commissions First Remote Wind Turbine to Generate Renewable, Clean Energy.
Employees Lead Effort to Make Chicago Plaza First LEED-Certified PepsiCo Headquarters. PepsiCo Honored with 2008 Energy Star Partner of the Year Award. PepsiCo Foodservice and Naked Juice Expand Starbucks Presence. PepsiCo International's China Foods Wins "China's Top Leaders 2008" Award. Wall Street Journal Article Recognizes PepsiCo for Leadership in Employment of People with Different Abilities. PepsiCo and Frito-Lay Join SmartWay in Commitment to Reduce Greenhouse Gas Emissions. PepsiCo Beats Coke in Race to Launch New Natural Sweetener (Stevia). PepsiCo Commits to Reducing Acryalmide Levels in Potato Chip Products and Restructured Potato Snacks in California. Subway Names PepsiCo "Vendor of the Year" for Sustainability Leadership.
• • • •
2.2 ORGANISATION STRUCTURE Managing Director
Finance & Accounts Manager Sales & Marketing Area Sales Pepsi Department Fountain FountainManager Manager Sales Manager Accountant
22 Factory Manager Director of ExecutivesAccounts Bottles Soft Drink 102 Distributors Sales Executives Accountant Shipping
Administration of Recruitment Production Production Production Department Manager Production Chemists Control Quality Engineer
There are five elements that comprise an organization structure:
Specialization of activities Standardization of activities Co-ordination of activities Centralization and decentralization of activities Size of the work unit.
The word organization has two common meanings. The first meaning signifies institution or functional group, and the second one refers to the process of organizing the way of work, which is arranged and allocated among members of the organization, so that the goal of the organization can be achieved efficiently. The organizing process involves balancing the company’s need: both for stability o one hand and change on the other hand. The organization structure gives stability and reliability of its goals. While altering an organization structure can be a means of adopting and bringing in about a change, which could otherwise be a source of resistance to change. Organization structure basically involves analysis of activities to be performed for achieving organizational objectives grouping them in to various individuals and delegating them with appropriate authority so that they can carry on their work properly. Organization structure can be defined as an arrangement and relationship of component parts, which also helps to determine the position of the company. An organization structure specifies the division of work activities and shows us how different activities are linked. Organization structure is a basic framework within which the managers’ decision making behavior takes place. Structure basically deals with relationships. It is an important scientific concept. In dimple terms it may be defined as a pattern in which various parts or components are interrelated or interconnected. The MD, Mr. Ruchirans Jaipuria is the head of the Organization and administration. The company is managed by the Director and is assisted by a team of well-qualified $ experienced senior management personnel.
2.3 MARKETING FUNCTION
The success of any enterprise directly depends upon the success of its Marketing function. Is the main function in this business? It plays a major role. After the production of the soft drinks, the functions of the Marketing Dept. starts and it continue process. The word marketing is not a simple word; it is of many complicated
activities which should be undergone. The sales persons should have to search for the opportunities and have to avail the opportunity. One Manager will be appointed to look after the total marketing activities in that region and some team will be there under the manager to execute the function. Marketing should be done on two concepts related to the customers psychology, those are; Fear of loss Hope of gain That means the marketer will create these feelings in the customer’s mind to market their products. For example Pepsi launched a promotional activity that see the crown of the bottle and win the gold coin; it creates these above mentioned feeling. The customer will think that if I am not taking that drink I may loss that gold coin (or) if I take that drink I can win that gold coin. These two sentences may be similar to see, but there is a difference in these words. The customer may be attracted towards the product because of any these two reasons. The approaches may vary from product to product, time to time, and place to place. The marketers have to create the need to the customer and have to show the solution for that need. Marketing Management is the process of planning and executive the conception, pricing and distribution of ideas, goods and services to create exchanges with target that satisfy customer and organizational objectives. That means marketing consists the distribution of soft drinks (distribution channels), promotional activities, providing the information about the products, advertising of the products and etc. Pepsi Company is giving the huge publicity about their products introduced in the market and the products yet to come in to the market. They are using the big film stars, cricket players, tennis players and etc. as their brand ambassador to attract the people. It creates a psychological feeling that their favorite name and famed persons are consuming the products then why should I consume the product. The soft drink companies are spending lots of amount on the advertising. There is always the cold war is going on. To face the competition they are adopting various methods. The soft drink companies have to maintain good relations with the distributors, dealers and the retailers, because they can make the profits and can break the profits to the company. Because of this reason they will take care of these persons.
This business totally depends on the seasons; the sales of the drinks will be in peak level in summer seasons. In the soft drinks industry without the marketing function they can not run the business. In this industry the competition is more and uncontrollable, because of this reason the Companies have to think of competing with the competitors. The Company is appointing the executives to improve their marketing. The Executives will go to the retailers and explain about the products and the offers that are offered to the retailers and to improve the business what type of support the Company will provide to the retailers. Some supervisors will be recruited to supervise the marketing executives whether they are doing their duties perfectly or not. To look after all the marketing department’s functions on Marketing Manager was recruited in the top level. In this way the marketing structure will made. Logistics also include the marketing function. The distribution of the soft drinks looked after by the marketing department only. They will supply the drinks to the retailers and collect the money and the empty bottles from the retails. If the marketing department is succeeded in all these functions then it is a successful marketing department. For this the department will struggle continuously. Some researchers also will be there for the marketing reach in the company because if the company is implementing the same strategies for a long time and for all the areas that many not be suitable for that time and area. For that the research department will do the continuous research for the new strategies.
The Four “P” Components of Marketing Mix:
Product Variety Quality Design Size Service Returns
List Price Discount Allowances Credit Terms Inventory
Channels Coverage Assortment Location
Sales Promotion Advertising Sales Force Public Relation Direct Marketing Transport
The consistency of the product mix refers to how closely relate the various product lines are in end use, Production requirements, distribution channels, or some other way. Pepsi Company’s product lines are consistent in so far so they are consumer goods that go through the same distribution channels. The lines are less consistent so far as they perform different functions for the buyers.
These four product-mix dimensions permit the company to expand its business in four ways. It can add new product line and can add more product variants to each product and deepen its product mix. Finally, it can pursue more product-line consistency. The future of any product is totally depends on these aspects. They should introduce the right product with a suitable price in a right place, at the same way the promotions also should match the place. That means the advertisement should be in right manner.
Product Mix Width & Product line length for Pepsi India Pvt. Ltd. compared to Coke Company: Product Mix Width Soft drinks
Pepsi Pepsi 7 Up Orange Mirinda Mountain Dew Lemon Mirinda Slice Diet Pepsi Evervess Soda Coke Coca-Cola Sprite Fanta Thumps Up Limca Maaza Diet Coke Kinely Soda
Product Line Length
American Marketing Association defines a brand as: a name, term, symbol, or design, or a combination of them, intended to identify the goods or service of one seller or group of sellers and to differentiate them from those of competitors. Thus a brand identifies the seller or maker. Under trademark law, the seller is granted exclusive rights to the use the local brand name is perpetuity. Brands differ from other Assets such as patents and copyrights, which have expiration dates.
The marketer has to do the survey to understand the needs and wants of the customer and has to inform to the production department. Then the R&D department will do the research accordingly. The production department will produce the product to fulfill the requirement of the customers. All these factors come under this part of the product mix. Pepsi Company is producing many brands of soft drinks and doing the marketing of those products. They are taking care of the quality of the products.
The company will fix the price of a product based on some aspects, those are; Production Cost, Variable Cost, and some other things and they will finally add their desired profit to that cost and the final cost of that product will be fixed. This is called the Maximum Retail Price (MRP). This step should be taken care because the price of the product should be according to its quality, and also should be taken care of the competitor’s price. If the price is too high when compared to the competitor and not worth of its quality then the sales of that product becomes difficult and the company will face the losses. The company should also have to think what will be the return on investment.
The company should think a lot before launching a product in to the market. They have to identify where it is better to launch the new product first so that they can get success. Generally every company selects a specific region to launch their new products, because first they will go for the test marketing before the mass production of the production. If the customers are satisfied with that product then they will start the mass production and launch in all areas. In case they found any fault with that product then they will redesign the product and rectify that problem and re-launch the products. They will take care of the distribution channels also while launching the new product in one area. They have to design what will be the channel structure and what will be the results of that structure. Pepsi Company following this structure; Producer ----- Dealer------ Retailer ------- Customer Producer-------company dealer------Retailer------Customer They will also estimate the distribution cost that is transportation cost and will search for the remedies to reduce the cost of distribution. The company should also think of the inventory, because they have to stock the goods for sometime and will supply the product to the customers. For this they have to arrange the warehouses.
In today’s competitive environment, having the right product at the right place, at the right time may not be enough to be successful. Effective communication
with the target market is essential promotion is the ‘p’ of the marketing mix designed to inform the market place about who you are, how good your product is and where you can buy it. Promotion is also useful to persuade the customers to try a new product or buy more of an old product. The promotional mix is the combination of personal selling, advertising, sales promotion and public relations that uses in its marketing plan. Above the line promotions refers to mainstream media advertising through common media such as television, radio, transport, billboards, newspapers and magazines. The company will offer many things to the traders as well as to the consumers. If the company will give good schemes to the dealers and the retailers then they will promote that brands and the sales will be increased. In the same way the companies are also providing many offers to the consumers like: Drink Pepsi, see the crown and win foreign trips, cash prize and many more things. Drink Pepsi and go to World Cup offer. Drink Sprit and win NOKIA Multimedia Mobiles. Drink 7up and win 7 Golden Lemons and many more gifts worth of 7 crores. Buy Maaza 1 lt. bottle and get 200ml Pulpy Orange worth Rs. 15 free. In the case of soft drinks the Advertisement is the main promotional activity. The companies are investing millions of rupees on Ads. They are preparing various types of Ads targeting different category of People. They are preparing the Ads very innovatively in the way to attract the customers and against their competitor. Through the Ads the company will create the feeling in the customers mind that this drink is good and should go for that drink only. Many customers will go for same brands because of the influence of the advertisements only. Some Ads will hurt the ego feeling of the customers and through that way also they will attract the customers. In these ways promotional activities plays a vital role in the sales increase of a product as well as it will create a brand image in the customers mind.
Comparison of the Slogans of the two Major Brands:
The slogans are very important for the advertising purpose. The slogans will attract the customers a lot. The slogans will give the views and the intentions of the
company that what they want to share with the customers. We can say slogan is an appeal to the customers about the products of the company. Pepsi and Coke have very different targeting strategies. Pepsi is promoting itself as something new , young and hip, which seems a little odd aver 100 years. Coke is tuning itself as the original, the authentic and appealing to a sense of traditional one. Pepsi has always targeted the youth market more aggressively than Coke. The companies have been changing their Logos continuously to attract the new customers. They are trying to create the new image and look to their Companies through changing the Advertisements taglines. Slogans of Pepsi Company 1903 – Exhilarating, invigorating, Aids Digestion. 1907 – Original Pure Food Drink 1909 – Delicious and Healthful 1915 – For All Thirst-Pepsi-Cola 1919 – Pepsi-Cola-it makes you Scintillate 1920 – Drink Pepsi-Cola. It will satisfy you 1928 – Pepsi you Up! 1932 – Sparkling, Delicious. 1934 – Refreshing and Healthful 1939 – Twice As Much For A nickel Too 1943 – Bigger Drinks, Better taste. 1949 – Why taken less When Pepsi is best? 1950 – more Bounce to the Ounce 1950 – The light Refreshment 1954 – Refreshing without Filling 1958 – Be Sociable, have a Pepsi 1961 – Now It’s Pepsi, for those who think Young. 1963 – Come Alive! You’ve in the Pepsi Generation. 1967 – Pepsi Pours it on 1969 – You got a lot to live and Pepsi got a Slogans of Coke Company 1886 – Drink Coca-Cola 1904 – Delicious and Refreshing 1905 – Good All the Way Down 1906 – The Drink of Quality 1906 – The great National Temperance 1907 – Delicious Coca-Cola, Sustain, Refreshes, Invigorates. 1908 – Sparkling-Harmless as Water and Crisp as Frost. 1909 – Delicious, wholesome, Refreshing 1910 – It Satisfies 1911 – It’s time to Drink Coca-Cola 1912 – Demand the Genuine-Refuse Substitutes. 1913 – The Best beverage Under the Sun 1914 - Demand the Genuine by Full Name 1916 – just One Glass Will Tell You 1917 – Three Million A Day 1919 – Quality Tells the Difference 1920 – Drink Coca-Cola with Soda 1922 – Thirst knows no Season 1923 – Refresh Yourself 1924 – Pause and Refresh Yourself
Lot to give. 1973 – Join the Pepsi People, feeling free 1975 – Have a Pepsi Day 1978 – Catch the Pepsi Spirit 1981 – Pepsi Got your Taste for life. 1983 – Pepsi now! 1984 – Pepsi, the choice of a new Generation. 1992 – Pepsi, Have it! 1993 – Be Young, Have Fun, Drink Pepsi 1995 – Nothing else is a Pepsi 1999 – The joy of Cola.
1925 – The Sociable Drink 1926 – Stop at the Red Sign 1927 – Around the Corner from Anywhere 1928 – A Pure Drink of National Flavours 1929 – The Pause that Refreshes 1930 – Meet Me At the Soda Fountain 1932 – Ice-Cold Sunshine 1933 – Don’t Wear A Tired, Tired Face 1934 – Carry a Small Back to Work 1935 – All Trails Lead to Ice-Cold Coca-Cola 1936 – What Refreshment Ought to be 1938 – The Best Friend Thirst Ever had 1939 – Make Travel more Pleasant 1940 – Bring in Your Thirst and Go Away Without it. 1941 – Completely Refreshing 1942 – Refreshment that Can’t be Duplicated. 1943 – The only think like Coca-Cola is Coca-Cola itself. It’s the real thing. 1944 – How About A Coke 1945 – Passport to Refreshment 1947 – Coke knows no season 1949 – Coca-Cola…. Along the highway to Anywhere. 1951 – Good food and Coca-Cola just Naturally go together. 1954 – For people on the go 1956 – Feel the difference 1957 – Sign of a Good Taste 1958 – The cold, Crisp taste of Coke 1959 – be really refreshed listen to Connie
Francis 1960 – Relax with Coke 1961 – Coke and food-Refreshing new feel. 1962 – Coca-Cola Refreshes you best. 1965 – Something more than a soft drink 1966 – Coke…After Coke…After Coke 1970 – it’s the real thing listen to the Carpenters 1971 – I’d like to buy the world a Coke 1976 – Coke Adds life 1979 – Have a Coke and Smile 1984 – Just for the taste of it (Diet Coke) 1985 – We’ve got a taste for you (new Coke) 1986 – Catch the Wave (New Coke) 1987 – You can’t beet the real thing 1989 – Can’t beat the feeling 1990 – Can’t beat the real thing 1993 – Always Coca-Cola 2001 - Thanda Matalab Coca-Cola 2003 – Coca-Coal Enjoy
When we compare the total slogans of the two companies we can first understand that Coke Company frequently changed its Slogans, some times trice and trice a year. But in case of Pepsi Company is not changing its slogans frequently. The slogans of Pepsi are not realistic and the company is exaggerating the features of the drinks and the company. Coke Company prepared its slogans in a realistic way and which is nearer to the features of the drinks and the company. Now Pepsi Company is not using any slogans for its drinks. Coke Company also not using the slogans that much frequently because the present day customers are taking care of the features of the product, taste of the products and packing of the products not the slogans of the Company.
Comparison of the Logos of Pepsi and Coke:
From the above picture we can observe that from origin itself Pepsi Company has been changing its Logos but Coke Company has not at all changed its Logo form
the beginning. From this we can understand that Pepsi Company has been trying to create some place in a differently with its new Logos where as Coke Company tried to fix the same Logo as brand name. Previously the name of Pepsi is Pepsi-Cola, and now it is changed to Pepsi. The reason for changing the Logos of Pepsi continuously was it merged many of the largest Food Companies with Pepsi like Tropicana, Fritos Lay and Galaxy Co. and etc. every time when merged with any Company it changed its Logos, because of this reason Pepsi became the largest food based products producer in the world. Coke Company is confined to the soft drink production only. As Coke Company has not changed its Logo, it is totally fixed in the minds of the people of the world. The people of the world have some what confusion on the Logo of Pepsi Company as it changed its Logos Continuously. Even though Pepsi Company changed its Logos continuously, it has not changed its slogans that much frequently. But in case of Coke Company, it has not at all changed its Logo but changed its slogans very frequently, sometimes thrice and trices a year. From this it is concluded that Pepsi Company tried to create a brand image of the Company in the minds of the customers using its different Logos but the same Slogans about the products. But in case of Coke Company it tried to create a brand image of the Company with the same Logo and different Slogans about the products. In this manner the two gaint Companies in the soft drinks industry compared and differentiated with each other. This cola wars became very common to the soft drink Companies. Soft drinks became a part of every day life of the people in all over India and other countries of the world. The pop culture has made resisting the temptation of sugar based carbonated beverages virtually impossible for most. The soft drink war between Pepsi and Coke keep on going and increasing day by day. They are using the different techniques to attract the customers towards their products mainly the cola products. The cola products are:
Coca-Cola Thumps up
Coke Company has the two cola brands, whereas Pepsi has only one brand of cola. Pepsi Company is using excellent marketing strategies, such as celebrity appearances to sell their products where as Coke’s realistic approach has placed them
at the top of the soft drink industry, mainly in the case of cola sales. We can observe the cola war through the Advertising of the two companies in the television. They prepare the Ads to compete with one another. They will hire the famous persons and the celebrities for their Ads. They will invest lots of amount on advertising. Through the advertising only the sales of the soft drinks are in creased. Even though Pepsi trying to get the No-1 place in the soft drinks industry the statistics have shown that they are not able to get that position when compared to Coke Company for the past few years. In case of Advertising Pepsi dominated Coke because most of the customers are attracted toward the Pepsi Company’s Ads only not to the Coke Company’s Ads because Pepsi is spending more on advertising preparation when compared to Coke Company. Pepsi Company is using the famous celebrities when compared to Coke Company and this increases the influence of the advertising on the customers. Both companies are conducting their operations successfully in more than 200 countries in the world. The war is going on in every country all over the world. Pepsi changed its Logos frequently 9 times from its origin but Coke Company has not at all changed its Logos, this is a great thing that we can observe.
2.4 HR FUNCTION
Worldwide code of conduct of PepsiCo.
Dear Fellow Associates: PepsiCo has consistently led the industry without standing financial performance – and we can rightfully take pride in our accomplishments. Like all winning teams, we are constantly asking ourselves, “How do the best get even better?” The answer is to deliver Performance with Purpose: our vision to take PepsiCo’s foundation of strength and build on it to create a company that both generates healthy financial returns and improves the lives of our consumers, our employees and our communities. To do better by doing better, we must start with our Values and our Code of Conduct. This means delivering superior financial performance the right way, achieving results with integrity, building trust with one another and all of our stakeholders – with our Values and our Code at the center of everything we do. Our commitment to applying our Values and the Code of Conduct to all aspects of our business is critical to delivering world-class performance … and doing so with a larger purpose that makes a difference to the world we share. My intent is that this Code of Conduct will help guide each of us as we work toward living our Values and making Performance with Purpose a reality. These indispensable tools serve as our unshakeable foundation. Thank you for your support and your personal engagement in ensuring that PepsiCo remains a highintegrity company that delivers consistently strong performance the right way.
[Chairman and Chief Executive Officer]
Respect for Our Employees:
We believe our most important strength is our employees. We seek to provide a work environment where all employees have the opportunity to reach their full potential and contribute to PepsiCo's success. We emphasize personal integrity and believe long-term results are the best measure of an employee’s performance. PepsiCo respects the human rights and the dignity of all employees. We endeavor to treat our employees fairly and honestly. We strive to maintain a safe, secure and healthy workplace and it is against our policy to use forced or child labor. We also strive to follow all applicable employment laws and regulations. We are committed to equal opportunity in all aspects of employment for employees and applicants. This means providing a workplace free from any form of discrimination or harassment, including sexual harassment. We seek to create a work environment where people feel comfortable and respected, regardless of individual differences, talents or personal characteristics. Our objective is for the diversity of our employees to reflect the diversity of the population wherever we operate and for the performance of all employees to be judged fairly and based on their contribution to our results. PepsiCo encourages an inclusive culture, which enables all employees to do their best. This means us: • • • Welcome and embrace the strengths of our differences, Treat each other with respect and fairness, and Foster an atmosphere of trust, open communications and candor. We recognize the needs of individuals to achieve professional and personal balance in their lives. We also respect employee privacy and will acquire and retain only that employee personal information that is required for operation of the Company’s business or required by law.
Health and Safety:
PepsiCo is committed to providing safe and healthy work environments at its facilities for all its employees, visitors, contractors and vendors. It is our policy to provide employees with a drug-free workplace. In order to create an environment free from threats, violence and intimidation, we are committed to a policy of zero tolerance for violence. We are dedicated to designing, constructing, maintaining and operating facilities that protect our people and physical resources. It is our policy to comply with all applicable health and safety laws and regulations, provide and require the use of adequate protective equipment and measures, and insist that all work be done in a safe and responsible manner. It is the responsibility of each employee to follow all Company policies and procedures related to workplace health and safety.
Responsibility for Compliance:
All employees are expected to display responsible and ethical behavior, to follow consistently both the meaning and intent of this Code and to act with integrity on a daily basis. Managers and leaders are expected to ensure that our business processes and practices reinforce the Code, to serve as positive role models by establishing and adhering to high ethical standards, and to create an ethical culture by encouraging and rewarding actions that are consistent with the Code. This Code cannot provide definitive answers to all questions. For that, we must rely on each person's judgment and integrity. You are encouraged to seek guidance when a situation may not be clear. Your supervisor, Human Resources manager or the PepsiCo Law Department will respond to questions and issues of interpretation about this Code. Waivers of this Code will be reviewed by the General Auditor and General Counsel, and in certain circumstances by the Board of Directors, and if required, will be appropriately disclosed.
2.5 FINANCE FUNCTION
Any company, which has to start and operate its business, has to invest its capital in fixed assets and floating assets and it also has to meet the daily
requirements of the company. However, depending on the nature of the business and the product being offered by the company, the ration of investment of capital in fixed and floating assets differs. Types of Capital Funds employed Working capital Institution finance Amount (In Lakhs) 60 15 40
Protection and Proper Use of Company Assets:
PepsiCo’s technological resources, including computers, voicemail, e-mail and Internet access, are to be used for proper purposes in a manner consistent with the Code and all other Company policies, including those related to discrimination, harassment and intellectual property. As with all PepsiCo assets, these resources are to be used for business purposes. It is generally not PepsiCo’s intent to monitor Internet access or messages on the voicemail and email systems. However, the Company reserves the right to do so in appropriate circumstances, consistent with applicable laws and regulations. If you access to PepsiCo.com, we cam get the information regarding the precautions steps to prohibit unauthorized access to the system. You should safeguard your passwords or other means of entry. Employees must not reproduce software assets licensed to PepsiCo, use illegally obtained software or distribute the original software media or unauthorized copies of software which the Company does not own or license.
Accounts and Record-Keeping
We will continue to observe the most stringent standards in the keeping of our financial records and accounts. Our books and records must reflect all components of transactions, as well as our own standard of insisting upon an honest and forthright presentation of the facts. We will ensure that the disclosures we make in reports and documents that we submit to the Securities and Exchange Commission and in other public communications are full, fair, accurate, timely and understandable. It is the responsibility of each employee to uphold these standards. Appropriate records must be kept of all transactions and retained in accordance with PepsiCo’s Records Management Policy and Records Retention Schedule. Employees are expected to
cooperate fully with our internal and external auditors. Information must not be falsified or concealed under any circumstance and an employee whose activities because false financial reporting will be subject to disciplinary action, including termination.
Financial comparison of Pepsi and Coke:
During 2008, the two companies turned in a remarkable similar set of financial results. Pepsi Company generated $20.4 millions throughout India, whereas Coke Company generated $20.5 millions. Here Coke Company earned more money when compared to Pepsi in India. So Coke dominated Pepsi in terms of the revenue generation. Pepsi Company earned $2.2milion in net profit and Coke Company earned $2.2million net profit. Here the two companies are earning profits equally. So we can understand that these two companies are competing with each other in an equal position. For this they are adopting new strategies for the growth of their revenue and the profits. Pepsi Company generated free cash flow of $2.9 billion, whereas Coke Company also generated the same amount of $2.9 million of free cash flows.
Sales Growth Gross Margin Net Margin Cash-to-Debit ration
12.8 % 69.6 % 10.7 % 0.55 %
12.0 % 61.1 % 10.6 % 0.33 %
Thus, Pepsi Company is either tied or has the edge over Coke in ever category except Gross Margins. The sales growth rate of Pepsi is growing faster than Coke Company. This is because of the strategies adopted by the Pepsi Company. Even though 92% of the people through out the world know the brand name of Coke, they are not able to capture the highest market share when compared to Pepsi. Pepsi has a
better ration of cash versus debt. Pepsi Company is the leader of the snacks producer in the world having 46% of the total market share and more than seven times the size of its next largest competitor, whereas Coke has not at all entered in to this field. In this way also Pepsi dominated Coke in the field of snacks production.
2.6 PRODUCTION FUNCTION
Production function of the soft drink companies is very crucial and a continuous process. In the summer season they work 24 hours a day around the clock, because
they have to supply the sufficient drinks to the market. Pepsi Company appointed Krishna Mohan Beverages as a franchise in the year 1992 and later it was changed to Pearl Bottling Pvt. Ltd. Pearl Bottling Pvt. Ltd. and working under Pepsi Company. It started its production operations in June, 1992 and running successfully.
The reasons for Franchise:
Franchise is a contract, to which company gives the rights to do the business under the name and image of principal’s. If a company sources its products from a franchise, it does not require setting up its own manufacturing plant, it reduces the investment in manufacturing facilities, inventory of raw material and other functions required for the manufacturing process. The company saves the management time and cost also. The company will control the quality of the products and the standards they are maintaining. With the strong relation with the manufacturer can be assured of regular supply of components as per the manufacturer’s specifications. The labor and union employees involved in the manufacturing are the responsible for the franchise. This is beneficial as it reduces the management time and involvement of solving their issues. But initially the company has to invest on launching the products because as a franchise will not take the risk of introducing the new products as they will not be ready to bare the risk on capital.
Distribution regions of PBPL:
Pearl Bottling Pvt. Ltd is distributing its products in three districts. Those are: Visakhapatnam Vizianagaram Srikakulam East Godavari West Godavari After West Godavari, that region comes under Gunturu PBPL franchise. It is a large unit when compared to Visakhapatnam unit.
The layout of the bottling plant of PBPL confines for all the products based on the line layout. The machine and equipment have been imported from Germany,
which produces the best capital equipment in the World. The company installed up to date automatic plant confirming to plant layout. The capacity of the plant is 24000 bottles per hours i.e. at the speed of 400 bottles per minute. The months from March to June, the plant is used to its peak in these summer season; the plant runs round the clock. This is because the demand reaches its peak in these summer months, hence they have to produce enough bottles of soft drinks at a speed to keep in pace with the disappearance of soft drinks from the shelves of the retailers.
PBPL is maintaining good quality control systems. Pepsi Company is the trade mark for the quality products. The bottles are usually examined for impurities continuously as the bottles move out. Samples are checked after every 10 minutes of production time by the chemist for its quality and hygienic condition. The chemical analysis is also made for flavours and the gas content is also checked. If any defects are noticed, the production is suspended and the corrective measures are taken so as to set right the bottling, process irregularities. Further samples from each batch are dispatched to the affiliated parent agency company in each week for quality checkup. Moreover, the agency of the company also lifts samples from the market at random for quality check up at anytime to make sure that the quality is maintained to the exact standard of the parent company. Every employee entering in to the production department should wear the cap and hand gloves. At the end of the production schedule, daily all the equipment, plant floor and wet patches are cleaned with bleaching powder and other solutions. The standards of hygiene maintained inside the production steps are commendable.
The production functions in PBPL:
The Visakhapatnam PBPL’s main work is bottling. This is bottling and filling station. The material used for making the drinks comes from USA in three forms, those are: Crystal form Liquid form
Power form In this form the company will get the raw material for the production. This work will be done very confidentially, because the formula of the drinks should not be revealed to its competitors. After receiving the raw material in PBPL they will mix the water, sweeteners, preservators and carbon dioxide to that raw material according to the fixed formula. Then the soft dink will be ready to use and this will be filled in the bottles. Initially four brands i.e. Pepsi, Mirinda, 7up and Lehar soda were bottled and distributed where as Slice were supplied by Cuttack plant. In May 1993, a cloudy lemon flavored drink called ‘TEEM’ was introduced which was not well received by consumers because of the well established brand “LIMCA”. In April 1998 a new cloudy lemon flavour, namely ‘Mirinda Lemon’ was introduced after discounting ‘TEEM’ and got success. In syrup making process the syrup of a particular product is prepared by heating sugar with activated carbon powder and filter (hyflousuper Cell) in the treatment tank for a specified time up to a particular temperature. During treatment most of the color, odor and some organic impurities are removed from the sugar syrup. This treated syrup passes through the filter press filter with filter papers and heat exchanges and the clear syrup is collected in the syrup moving tank where the essence of particular product will be added for which a required amount of sugar is taken for treatment. The essence and sugar syrup are mixed into the tank with the help of a mechanical stirrer and finally the flavour syrup is ready for use in finished products. The second process is water treatment. As an added ingredient water can compromise up to 90% of a soft drink. The quality of water is thus of a particular importance to the soft dinks manufacturers. In this process water will be brought to the treatment tank and then water treatment chemicals such as hydrated lime, bleaching powder and ferrous sulphate are added to the tank and are moved thoroughly by the help of mechanical stirrer. The treated water is then passed through the specially designed filtration plant containing chemicals such as activated carbon (granular) and finally the manufactured will get the standard water i.e. suitable for soft drinks and then bottles moves towards crowner where the sealing is done with the help of crowns. The crowns are used in order to retain the carbonation flavours as well
as to protect the products from outside contamination and spoilage. The bottles are checked for maintaining the required standard. Finally, the filled bottles are checked for maintaining the required standard and the filled bottles are collected in plastic creates from the conveyor. The marketable lot comprises of a crate and is filled with 24 bottles in each plastic crate. This crate is mainly useful to protect the bottles and keep them in good condition and eliminates breakage and is also collected back in the same crates. Then the finished products are transferred to the shipping department for the distribution.
2.7 FUTURE PLANS
Every company will have the future plans; in the same way Pepsi Company also has its future plans to increase its sales and the market share in the soft drinks industry. After a long research work they will go for the new plans. Some of the future plans were given below.
In order to capture Indian food market PepsiCo India is planning to launch indigenous food products. PepsiCo is going to make an investment of around $110 million in its beverages business in India to increase the production capacity and the quality of the products. On future plans, the company will launch Lipton ice tea all over the country this summer. Gatorade, its sports drink, will also be bottled in India this year. The company is also seriously considering bringing some products from Quaker Oats into the country. PepsiCo’s beverage business has also decided to invest $220 million in the current year. Indra Nooyi, PepsiCo’s Indian face, says the $27-billion foods and beverages giant will invest $300m-$500 millions into its India operations over the next five years and clearly indicated that the fast-growing snack foods business was going to be the growth driver in the country. Clearly, the snacks business — which has grown five-fold in the past four years — is lifting PepsiCo’s fortunes. The CEO of Pepsi India, Nooyi says the company is now looking at tripling this business in the next three years or so, and is even testing Leher Kurkure for the US and UK markets. It is learnt that the total investment for the beverage business of PepsiCo India for the next three year will be around $350 million. PepsiCo India on Monday announced a Rs 1,000-crore investment for this calendar year that will see the food and beverage major expanding its manufacturing capacity and supply chain, among others, in the country. In this way Pepsi India Company is taking steps to increase their sales and their market share in the soft drinks industry.
The main part of the report i.e. Analysis part is covered in this chapter. Investigator conducted survey in 300 Retail outlets in 3 various areas. After conducting the survey, the total collected information has been interpreted using a structured format. The required information is derived from that format and later interpretation and analysis have been done using that information. This analysis part contains tables and graphical representation. Only histograms have been used in this graphical representation. We can understand the information easily through the graphs and can come to a conclusion from the final information from this chapter. Because of that reason this chapter is very important in the entire study of the project. Without this analysis and interpretation we can not give the essence of the study easily. This chapter is very useful to conclude the total survey and also can understand the position of the company and the opinion of the retailers and customers regarding the company. This chapter is totally based on the primary data collected through the survey conducted on the retailers of various markets. This survey is also is very useful to the company also to understand and take the further steps to improve their performance and through that they can get a good market share in the soft drink industry. In this chapter the interpretation is also provided along with the analysis of the collected data. The company may get the valuable information through this interpretation. Because of this reason the investigator has chosen this study.
3.2 DETAILS OF THE SURVEY CONDUCTED
The total data collected in three areas in Srikakulam district of total of 300 retail outlets. They are given below:
Table 3.1 Respondents Analysis CLUSTER Cluster-1 Cluster-2 Cluster-3 Total SAMPLE SIZE 130 90 80 300 AREA Srikakulam Amadalavalasa Narasannapeta Percentage 43 30 27 100
The table explains the sample size and the respondents in three clusters selected for the project work. Out of the 300 retail outlets, 130 outlets comprising 43 Percent of sample size are taken from Srikakulam market, 90 retail outlets comprising of 30 Percent of sample size from Amadalavalasa market and the remaining 80 outlets comprising of 27% from Narasannapeta market respectively. It is concluded that most of the respondents (retail outlets) are selected from Srikakulam market for conducting the study. All these three markets are adjacent to one another in same district. Because of this reason the retailers as well as the consumer’s behavior will be similar. Because of this reason we can understand the market that particular area well. Investigator has chosen these markets for his study because these are the local markets for him and will be useful to know the market condition of his residing area. If the investigator has chosen any other market the study may become difficult and also may not get the proper information from the retailers. The markets selected for the survey belongs to the rural areas. This may help the investigator to understand the mindset of the retailers as well as the consumers in the rural areas and his suggestions to the company regarding the rural market condition of soft drinks will be useful to the company.
Table 3.2 Pepsi & Coke Brands Available In Various Clusters: 51
S.No 1. 2. 3. 4
8 7 6 5 4 3 2 1 0
Market Srikakulam Amadalavalasa Narasannapeta Average
Pepsi 5 5 5 5
Coke 6 5 7 6
It is found from the table 3.2 that, out of 130 outlets from Srikakulam market on average 5 Pepsi brands, 6 Coke brands are available. Out of 90 outlets from Amadalavalasa market, on an average 5 Pepsi brands and 5 Coke brands are available. Out of 80 outlets from Narasannapeta market 5 Pepsi brands and 7 Coke brands are available. On an average Pepsi 5 and Coke 6 brands are available. It is concluded that Coke dominated Pepsi in terms of availability of its brands in Srikakulam and Narasannapeta markets and in Amadalavalasa market both are in equal place.
Table 3.3 Top brands Available in Srikakulam Cluster: S.No Brands 52 Retail outlets Percentage
1. 2. 3. 4. Total
Slice (Pepsi) Mirinda (Pepsi) Sprite(Coke) Limca(Coke)
59 32 26 13 130
46 24 20 10 100
Top Four Brands Available in Srikakulam
50 40 30 20 10 0 Slice 1 Mirinda 2 Brands Sprite 3 Limca 4 Percentage
It is found from table 3.3 that Slice a Pepsi brand with 46% of total sales occupied the top position in Srikakulam market. Mirinda occupied the second place with 24%, Sprite occupied the 3rd place with 20% and Limca occupied the last place with 10% respectively in the top selling soft drink brands in Srikakulam market. This indicates the increase in the consumption of the fruit based drinks in Srikakulam market. So it is concluded that Pepsi Company dominated Coke Company in Srikakulam market in terms of top selling brands.
Table 3.4 Top Four Brands Available In Amadalavalasa Cluster: S.No Brands Retail outlets 53 Percentage
1 2 3 4 Total
Mirinda (Pepsi) 7 Up (Pepsi) Sprite (Coke) Thumps Up (Coke)
36 23 16 15 90
40 26 18 16 100
Top Four Brands available in Amadalavalasa
45 40 35 30 25 20 15 10 5 0 Mirinda 1 7 Up 2 Brands Sprite 3 Thumps Up 4
It is found from table 3.4 that Mirinda, a Pepsi brand with 40% of total sales occupied the top position in Amadalavalasa market. 7 Up occupied the second place with 26%, Sprite occupied the 3rd place with 18% and Thumps up occupied the last place with 16% respectively in the top selling soft drink brands in Amadalavalasa market. So it is concluded that Pepsi Company dominated Coke Company in Amadalavalasa market by occupying the first two positions in terms of top selling brands.
Table 3.5 Top Four Brands Available In Narasannapeta Cluster: S.No Brands 54 Retail outlets Percentage
1 2 3 4 Total
Thumps up (Coke) Mirinda (Pepsi) Sprite (Coke) Slice (Pepsi)
30 25 15 10 80
38 31 19 12 100
Top 4 Brands available in Narasannapeta
40 35 30 25 20 15 10 5 0 Thumps up 1 Mirinda 2 Sprite 3 Slice 4
It is found from table 3.5 that Thumps up; a Coke brand with 38% of total sales occupied the top position in Narasannapeta market. Mirinda occupied the second place with 31%, Sprite occupied the 3rd place with 19% and Slice occupied the last place with 12% respectively in the top selling soft drink brands in Amadalavalasa market. So it is concluded that Coke Company dominated Pepsi Company in Amadalavalasa market by occupying the first positions in terms of top selling brands.
Table 3.6 No of Bottles Sold per Day in various individual Clusters: Brand Pepsi Srikakulam 52 Amadalavalasa Narasannapeta 45 55 42 Average 46
No. of bottles sold per day on avrage
60 50 40 30 20 10 0 Srikakulam Amadalavalasa Narasannapeta Average
It is found from table 3.6 that on an average 52 bottles of Pepsi brands and 44 bottles of Coke brands are sold in Srikakulam market, 45 bottles of Pepsi brands and 35 bottles of Coke brands are sold in Amadalavalasa market, 42 bottles of Pepsi brands and 50 Bottles of Coke brands are sold in Narasannapeta market per day. On average of these three markets 46 bottles of Pepsi brands and 43 bottles of Coke brands are sold per day. So it is concluded that Pepsi Company dominated Coke Company in these areas in terms of no. of bottles sold per day.
Table 3.7 Service (supply) required to the retail outlets from the company:
Alternative Days 56
1 2 3 4
Srikakulam Amadalavalasa Narasannapeta Average
63 49 55 56
25 27 36 29
12 24 9 15
Service (supply) required from the companies
70 60 50 40 30 20 10 0 Srikakulam 1 Amadalavalasa 2 Narasannapeta 3 Average 4 Daily Alternative Days Weekly Twice
It is found from table 3.7 that most of the retailers in all the areas required the daily service (supply) of soft drink companies. On an average of all the markets 56 % of the retailers require the daily service of the company, 29 % of the retailers require the alternative days service and remaining 15% retailers only require the weekly twice service. So it is concluded that the most of the retailers require the daily service (supply) from the soft drink companies that indicates the high sales of the soft drinks.
Table 3.8 Satisfaction levels with Pepsi Company’s Service (Supply): S.No 1 Market Srikakulam Highly satisfied 60 57 Satisfied 40 Not satisfied 0
2 3 4
Amadalavalasa Narasannapeta Average
65 70 65
30 28 33
5 2 2
Satisfaction levels with Pepsi Service
80 70 60 50 40 30 20 10 0 Srikakulam 1 Amadalavalasa 2 Narasannapeta 3 Average 4
Highly satisfied Satisfied Not satisfied
It is found from table 3.8 that in all these areas majority of the retailers are highly satisfied with the Pepsi service and less number of the retailers is satisfied with the service of the Pepsi Company. On an average of all the markets most of the retailers’ i.e.65% is highly satisfied with the Pepsi service (supply), 33% retailers are satisfied with the service of the Pepsi and the remaining 2% are not satisfied with the service of the Pepsi Company. So it is concluded that the retailers are highly satisfied with the service (supply) of the Pepsi Company.
Table 3.9 Satisfaction of levels with Coke Company’s Service (Supply): S.No 1 Market Srikakulam Highly satisfied 45 58 Satisfied 50 Not satisfied 5
2 3 4
Amadalavalasa Narasannapeta Average
40 45 43
55 50 52
5 5 5
Satisfaction with Coke service
60 50 40 30 20 10 0 Srikakulam 1 Amadalavalasa 2 Narasannapeta 3 Average 4 Highly satisfied Satisfied Not satisfied
It is found from table 3.9 that on an average of all the markets 65% retailers only are highly satisfied with the Coke service (supply), 50% retailers are satisfied with the service of the Coke and the remaining 5% are not satisfied with the service of the Coke Company. So it is concluded that the service of the Coke Company is moderate when compared to Pepsi Company. So here Pepsi dominated Coke in terms of the service (supply) to the retailers.
Table 3.10 Retailer’s opinion on Trade Schemes offered by Both Companies in Various Clusters: S.No Market Pepsi 59 Coke
1 2 3 4
Srikakulam Amadalavalasa Narasannapeta Average
41 49 41 44
59 51 59 56
Trade schemes offered by both companies
70 60 50 40 30 20 10 0 Srikakulam 1 Amadalavalasa 2 Narasannapeta 3 Average 4 Pepsi Coke
It is found from table 3.10 that in all the areas majority of the retailers agreed with the Coke when compared to Pepsi. On an average most of the retailers i.e.56% voted for Coke Company for its trade schemes offered to the retailers and the remaining 44% of the retailers are voted for Pepsi Company for its trade schemes offered to the retailers. So it is concluded that Coke Company dominated Pepsi in these areas in terms of the trade schemes offered to the retailers.
Table 3.11 Opinion on Consumer Promotions offered by both Companies: S.No 1 Market Srikakulam Pepsi 61 60 Coke 39
2 3 4
Amadalavalasa Narasannapeta Average
57 60 59
43 40 41
Consumer offers offered by both companies
70 60 50 40 30 20 10 0 Srikakulam 1 Amadalavalasa 2 Narasannapeta 3 Average 4 Pepsi Coke
It is found from the table 3.11 that majority of the retailers of all these areas are satisfied with Pepsi Company for its consumer promotions offered to the consumers. On an average most of the i.e. 59% is satisfied with the consumer promotion offers offered to the consumers and the remaining retailer i.e. 41% of the retailers are satisfied with the Coke consumer promotions offered by the Coke company offered to the consumers. So it is concluded that Pepsi dominated Coke in these areas in terms of consumers promotions offered to the consumers.
Table 3.12 The influence of T.V Ads in increasing the sale of Soft Drinks: S.No Market Yes No
1 2 3 4
Srikakulam Amadalavalasa Narasannapeta Average
74 51 60 62
26 49 40 38
The influence of T.V ads in sales increase
80 70 60 50 40 30 20 10 0 Srikakulam 1 Amadalavalasa 2 Narasannapeta 3 Average 4
It is found from the table 3.12 that on an average most of the retailers (62%) are saying that T.V Ads will help in the increase in the sales of the soft drinks and the remaining (38%) are saying that there will be no influence of T.V Ads on the increase of the sales of the soft drinks. so it is concluded that there will be influence of the T.V Ads on the increase in sales of the soft drinks a lot.
Table 3.13 Comparing the increase in sales from 2008-2009 S.No Market High 62 Less Same
1 2 3 4
Srikakulam Amadalavalasa Narasannapeta Average
55 30 40 42
40 63 48 50
5 7 12 8
Comparing the increase in sales
70 60 50 40 30 20 10 0 Srikakulam 1 Amadalavalasa 2 Narasannapeta 3 Average 4 High Less Same
It is found from the table 3.13 that on an average most of the retailers (50%) is saying that the increase in sales when compared to 2008 to 2009 is less, 42% of the retailers are saying high and the remaining 4% retailers are saying same (no increase). So it is concluded that the increase in the sales from 2008-2009 is moderate and the chance of increase in sales is high in future.
Table 3.14 The Percentage of Fruit Based Soft Drinks in Total Sales
S.No 1 2 3 4
Market Area Srikakulam
20% 33 34 32 33
10% 37 37 34 36
Amadalavalasa 29 Narasannapeta 34 Average 31
% of Jucie based Soft drinks
40 35 30 25 20 15 10 5 0 Srikakulam 1 Amadalavalasa 2 market Area Narasannapeta 3
30% 20% 10%
It is found from the table 3.14 that on an average most of the people (36%) are saying that the sales of the fruit based soft drinks are comprises 10%, 33% of the retailers are saying fruit based soft drinks comprising 20% of the total sales of soft drinks and the remaining 31% retailers are saying that fruit based soft drinks comprises 30% of the total sales of the soft drinks. So it is concluded that the consumption of fruit based soft drinks has been highly increased and go on increasing. The reason for this is the awareness of the health consciousness.
Table 3.15 Pepsi Visi coolers and other coolers available in the Market
S.No 1 2 3 4
Market Srikakulam Amadalavalasa Narasannapeta Average
Pepsi cooler 32 21 31 28
Coke+ other coolers 68 79 69 72
Visi Coolers availability in various clusters
90 80 70 60 50 40 30 20 10 0 Srikakulam 1 Amadalavalasa Narasannapeta 2 3 Average 4
Pepsi cooler Coke+ other coolers
It is found from the table 3.15 that on an average most of the retailers (72%) are using the Coke and the other coolers in their stores and only 28% of the retailers are using the Pepsi Visi Coolers in their retail stores. they are also not taking care of the working condition of the Visi Coolers in a proper manner. So it is conclude that the Pepsi Company is not providing the sufficient Pepsi Visi Coolers to the retailer and when compared to the Pepsi Visi Coolers the Coke Visi Coolers are more in the market where the survey was conducted.
Table 3.16 Most Soft Drinks Consuming Category in Various Markets
S.No 1 2 3 4
Market Srikakulam Amadalavalasa Narasannapeta Average
Male 18 12 19 16
Female 10 11 18 13
All People 59 56 39 51
Youth 13 21 24 20
70 60 50 40 30 20 10 0 Srikakulam 1 Amadalavalasa 2 Narasannapeta 3 Average 4 Male Female All People Youth
It is found from the table 3.16 that on an average most of the retailers (51%) is saying that the soft drinks are consumed by all age and all gender people with out no difference. The next places were occupied by the youth, Male and Female respectively. So it is concluded that the consumption of the soft drinks became a common thing to all the group of people mainly the youth and because of this reason the sales of the soft drinks go on increasing.
Table 3.17 The mode of payment for the soft drinks [Cash or Credit] 66
S.No 1 2 3
Pepsi Cash 100
Pepsi Credit 0 0 0
Coke Cash 100 100 100
Coke Credit 0 0 0
Amadalavalasa 100 Narasannapeta 100
Soft Drinks Supply on Cash or Credit
120 100 80 60 40 20 0 Pepsi Cash Pepsi Credit Coke Cash Coke Credit Brands 1 Srikakulam 2 Amadalavalasa 3 Narasannapeta
It is found from the table 3.17 that on an average both the companies Pepsi and Coke Companies are supplying their products only on cash payment and they are not providing any credits to the retailers. The company people will supply the products to the retailer and they will return after some time and will collect the money for those products. They will not give more time for the retailers to give the payment for the drinks. So it is concluded that the Companies, both Pepsi and Coke are not at all providing any credit to the retailers while purchasing the soft drinks.
Table 3.18 Consumption of Soft Drinks at Home and at Shop:
S.No 1 2 3 4
Market Srikakulam Amadalavalasa Narasannapeta Average
At Shop 80 70 75 75
At Home 20 30 25 25
Soft Drinks consumption Places 90 80 70 60 50 40 30 20 10 0 Srikakulam 1 Amadalavalasa 2 Market Narasannapeta 3
At Shop At Home
It is found from the table 3.18 that on an average most of the Customers (75%) are consuming the soft drinks at the shop itself and the remaining 25% of the customers are consuming the soft drinks at home. The customers who are consuming soft drinks at home are generally purchasing the Pet Bottles and the Glass bottled drinks are consumed at the shop. So it is concluded that the consumption of soft drinks is more at shops when compared to the consumption at home.
The comparison of Pepsi and Coke in the there surveyed areas:
The survey is conducted in the three market areas existing in Srikakulam District. According to the survey conducted, both the companies Pepsi and Coke have
the same (similar) market share. When compared to Coke, Pepsi has some what high market share according to the survey. Many theses are declaring the different market shares of the both companies but nobody can decide the exact market shares of the two companies, because these shares are not stable and rapidly changing. When we compare the brands availability of both companies in these three markets, Coke brands availability is more when compared to Pepsi Company Brands. When we analysis the reason for this, Pepsi Company is not concentrating on all their brands and concentrating on the most selling brands and they are supplying those brands more. In case of Coke Company, it is concentrating on all their brands that mean they are trying to satisfy all the customers by providing/supplying all its products. Some Pepsi brands are available in some places only, for example ‘Mountain Dew’. In case of the top 4 most selling brands in these surveyed area, out of 3 market areas in 2 markets Pepsi brands occupied the first place. From this we can say that Pepsi brands are in top selling drinks position in the market. The reason for this is, Pepsi Company is spending more money on advertising with to film stars, sports stars and the celebrities. Because of this reason many people are attracted towards the Pepsi Company’s brands. When we come to the service (supply) to the retailers, most of the retailers (65%) are highly satisfied, 33% retailers are satisfied (moderate) and the remaining 2% retailers are not satisfied with the service of the Pepsi Company’s service. In case of Coke Company’s service 43% of the retailers are highly satisfied, 52% of the retailers are satisfied (moderate) and the remaining 5% of the retailers are not satisfied. From this information we can understand that Pepsi Company’s services to the retailers are good when compared to Coke. Even though Pepsi Company is not providing all their products to the retailers, it is supplying the limited products in a good way. In case of Coke Company, even though Company is providing all its products, it is not able to supply those products in a proper manner that is in time delivery supplying sufficient drinks to the retailers. The schemes offered to the retailers are important incase of all the products, because retailers are the makers and breakers of the company’s profits. When we come to the soft drink industry it has its own importance. In the surveyed areas on an average 56% of the retailers are satisfied with the trade schemes offered by the Coke
Company and the remaining 44% of the retailers are satisfied with the Pepsi Company’s trade schemes offered to the retailers. That means Coke is providing good trade schemes like with every case of cool drinks on bottle free along with the general profits, free gifts, appreciations to the retailers who sold more drinks in that market area etc. are good when compared to Pepsi Company. To improve the good will and loyalty of the retailers Pepsi Company has to adopt the new strategies to develop the new schemes. The schemes offered to the consumers are important, because the consumers are attracted towards the soft drinks by seeing the offers. These offers will create an anxiety that we may win that gift by drinking that particular brand drinks. To utilize this company will introduce these consumer promotional offers. In the surveyed areas on an average 59 percent of the retailers are satisfied with the promotional offers offered by the Pepsi Company and the remaining 41 percent of the retailers are satisfied with the consumer promotional offers offered by the Coke Company. From this we can understand that Pepsi Company is providing good consumer promotional offers when compared to Coke Company. Because of this attractive consumer promotional offers most of the consumers are being attracted toward the towards the Pepsi Company’s products. To know whether a retailer is selling the Pepsi Company’ products or Coke Company’s and to promote the sales of their Company drinks the companies are providing the company’s Visi Coolers (from which all the drinks which are kept in the Cooler are visible to out side through a glass door) to the retailers for free of cost. Only 28% of the retailers are using the Pepsi Companies Visi Coolers and remaining 72% of the retailers are using the Coke and other coolers in their retail store. From this we can understand that when compared to Pepsi Company, Coke Company provides more no. of Visi Coolers to the retailers. To improve the sales of Pepsi Company they have to provide the Visi Coolers to the retailers. By observing all the above things we can’t determine who the market leader of the soft drinks industry, Pepsi or Coke. This is fluctuating continuously in the market.
The Project entitled “Retailers Perception on soft drinks- A Comparative Analysis of Pepsi V/s Coke” has been divided into four chapters to arrange the total information in a perfect manner. The first chapter deals with the Introduction, Need for the Study, and Objectives of the Study and Limitations of the study. Through this chapter we can understand the opinion of the investigator on that project and the interest he paid on the project. From this chapter we can know the over view of the soft drinks industry an the Pepsi Company in a very detailed manner. In the ‘Introduction (1.1)’ the details of the soft drinks industry i.e. origin of the soft drink industry, growth of the industry and the major players of the industry and the total details of the Pepsi Company and the position of Pepsi Company in India and some other details pertaining to the Company has been given. After giving the details of the Company, the topic introduction was given like the definitions of the topic collected from different sources and the analysis of those definitions were explained. After the explanation of the definition, the importance of the study and the use of the study to the Company were clearly explained. This will help to understand why the investigator has chosen the topic as his project. After the introduction the ‘Need for the study (1.2)’ has been explained briefly. In this, why the investigator has chosen that topic and what can he get from that study and how it is useful to him is explained briefly. Because without any need the study will not be conducted. After explaining the need of the study the ‘Objectives of the Study (1.3)’ was given. In this part, what information the investigator wanted collect and why he wanted to do the project in that particular company and what goal he wanted to reach through this project has been clearly explained. Finally the ‘limitations of the study (1.4)’ were given in the first chapter. For every study there will be some limitation and we may call those as hurdles for the study. The limitations may be the time limits, financial limits or troubles from the environment. In this study environment means the markets and the lack of awareness in the retailers.
The second chapter deals with Genesis and Growth of the company, Organizational structure of the company, all the functional areas like Marketing, HR, Finance and Production, finally the Future trends of the Company. All these functions are explained. In ‘Genesis and Growth of the Company (2.1)’, the origin of the soft drinks industry and Pepsi Company and its gradual growth of the Company has been explained. The growth of the Company has shown year by year. The milestone of 2000-08 of the Company has also been included in this portion of the second chapter. After the explanation Genesis and Growth of the Company the ‘Organization Structure (2.2)’ of the Company and its importance and the use has been explained with the Organization Chart of the Company. By using the Organization Chart we can understand the position of the management in that Company and the relation between the superiors and the subordinates in the Company. The Organization structure can decide the future of the company whether it is going to be successful or a failure one. After this the ‘Marketing function (2.3)’ of the Company has been explained in a very detailed manner. In the marketing strategies of the Company and the technique of the Company has been explained. In this the Comparison between the Pepsi’s and Coke’s marketing functions has also been provided like comparison between the Slogans of the Company’s, Logos of the Company’s and the Comparison of the Advertisements of the Company’s. After the marketing function the ‘HR functions (2.4)’ of Pepsi Company has been explained. In this the code of conduct of the company and the respect the company is giving to the employees and the facilities provided and the precautionary steps taken for the health and safety of employees has been explained in this portion. After completion of the HR function the ‘Finance functions (2.5)’ was given. In this the details of the capita used for the establishment of the Company in India have been given. In this the Protection and the Proper utilization of the resources and how to keep the records and company accounts has also been explained. The total financial comparison of Pepsi and Coke was given in this portion. After the Financial functions the ‘Production function (2.6)’ was explained. In the production function the details of the production of the soft drinks was explained i.e. how the water purification treatment will be conducted, how the syrup will be prepared, on what basis the sugar will be added to the syrup to prepare the final product very clearly point by point. In this chapter the details starting from the water
treatment to the loading of the soft drinks in the Lorries has been explained with the suitable diagrams. Finally, the future trends of the Company i.e. what steps the company is going to take for its development and progress to reach in top position in the soft drink industry and to get the highest market share. The third chapter includes the data analysis and interpretation. In this chapter, the data collected from 300 retail outlets through the survey conducted personally during the project period has been summarized, tabulated, analysed and interpreted very clearly. This is a very important chapter in this project work. This chapter gives the clear picture of the total study to the observer. A specified questionnaire was prepared to collect the information from the retailers regarding their opinions on the soft drink companies. The questionnaires were given to the retailers and asked them to fill them. The total data collected from the retailers has been summed up carefully using a specified format. The total data was entered in that format and some calculations were made. Finally some required data was extracted and tabulated to give a clear picture. From that tabulated data the graphs have been prepared. By the observation of the graphs the interpretation was done. Interpretation is the result of the total study. Based on the interpretation the comparative study between Pepsi and Coke was done. From this interpreted information we can understand the position of the Pepsi Company and Coke Company Comparatively in the three surveyed clusters. This chapter is very useful to the investigator to do the comparative Analysis between the Pepsi and Coke Companies. The major findings are as follows:
1. Coke Company dominated Pepsi Company in terms of availability of its brands in Srikakulam, Narasannapeta and Amadalavalasa Clusters.
2. Pepsi Company dominated Coke Company in Srikakulam and Amadalavalasa
Clusters and Coke dominated Pepsi in Narasannapeta Cluster in terms of top selling soft drink brands.
3. Pepsi Company dominated Coke Company in these three Clusters in terms of
number of bottles sold per day.
4. Most of the retailers (56%) require the daily supply (service) from the soft drink
Companies, which indicates the high sales of the soft drinks. 5. Most of the retailers are highly satisfied with the service (supply) of Pepsi Company. 6. The service of Coke Company is moderate when compared to Pepsi Company, so here Pepsi dominated Coke Company in terms of Service (supply) to the retailers. 7. Coke Company dominated Pepsi Company in these three Clusters in terms of trade schemes offered to the retailers. 8. Pepsi Company dominated Coke Company in these three Clusters in terms of consumer promotional offers offered to the consumers. 9. There will be influence of the T.V Ads on the increase in sales of the soft drinks a lot. 10. high in future. The increase in
the volume of sales from 2008-2009 is moderate and the chance of increase is
The consumption of fruit based soft drinks has been highly increased and goes on increasing. The reason for this is the awareness of the health consciousness in the people.
Pepsi Company is not providing the sufficient Pepsi Visi Coolers to the retailer and when compared to the Pepsi Visi Coolers the Coke Visi Coolers are more in these clusters, where the survey was conducted.
Consumption youth. Because of this reason the sales of the soft drinks goes on increasing.
the soft drinks became a common thing to all the group of people mainly the
14. purchasing the soft drinks. 15.
both Pepsi and Coke are not at all providing any credit to the retailers while
The consumption of soft drinks is more at the shops when compared to the consumption at home.
16. products to the retailers.
The dealers are not providing the sufficient information regarding the schemes and the new
1. Pepsi Company has to supply their entire product sufficiently and regularly in
time to the retailers in these clusters. So that the loyalty of the retailers will be increased.
2. The Pepsi Company has to maintain the top position and has to try to increase
their performance in Srikakulam and Amadalavalasa cluster and it has to evaluate the reasons for not capturing the top position in Narasannapeta cluster. According to the reasons the company has to take the steps to reach the top position. 3. As most of the retailers require the daily supply, the Company has to supply the drinks daily to the retailers, so that they can serve the consumers according to their requirements. If they don’t supply the drinks daily and sufficiently the sales will be decreased.
4. As the retailers are highly satisfied with Pepsi Company’s service and not that
much satisfied with Coke Company’s service (supply), Pepsi Company can use this opportunity to attract the retailers towards Pepsi by explaining the quality of Pepsi Company’s service to increase the sales of the company.
5. The trade schemes offered by Pepsi Company to the retailers should be
increased and also profitable to the retailers. If they are satisfied with the offers then they will promote the drinks more and the profit will be more to the company.
6. Pepsi Company should introduce the new and attractive consumer promotional
offer. Then the consumers will be attracted towards the Pepsi brands. Then the profits of the company will be increased.
7. As the T.V Ads are influencing the soft drink sales, the company should design
the new ads in an attractive way. The ads should be change frequently. The different ads should be shown in different regions according to the culture of that area.
8. As the health consciousness is growing, the people are consuming the fruit
based soft drinks. Company has to conduct some programs to bring more awareness of the fruit based soft dinks and its benefits to the consumers. Then the sales of the fruit based soft drinks sales will be increased. 9. Pepsi Visi coolers are supplied very less to the retailers when compared to coke. The company has to supply more Visi coolers to the retailers to increase their business. The company also has to check the condition of the Visi coolers regularly and if any problems are there then they have to rectify those problems. 10. The soft drink
companies are not providing the credit. This is a problem to the retailers because they have to invest the amount before the sales of the soft dinks. This may be the problem for some retailers with low investment. So it is better to provide the credit system to the retailers. 11. When compared
to the previous years the consumption of the soft drinks at home increased. The pet bottles are mostly consumed at home, so the sales can be increased by providing some more offers on the pet bottles and promote the sales of the pet bottles.
The project was a great experience for me in order to study the marketing aspects in the world. It was a great opportunity for me to do the project work in the end of the course because till now we learned the theory regarding the marketing and the marketing related concepts, but now we got the chance to implement that theoretical knowledge to do the project and got the practical experience in the marketing field. Through this study I learned a lot that how to approach a customer or any other people and how to explain our view to them. Soft drink industry is a vast growing industry when compared to many other industries. This industry is a place where two major players are there in the world. Pepsi Company is one of them. Doing my project in Pepsi is a great experience as it gave me lot of opportunity and scope to understand the soft drink industry and its marketing structure and distribution channels. Lot of valuable information regarding the company and also the retailers, has been collected from the survey, which helped me clearly to understand the real problems faced by the marketers to distribute and also make retailers to sell the company’s products in the market. I understood how difficult to do the marketing in the present scenario to get success in the marketing field. From the analysis of the data collected from the retailers the investigator got some important findings regarding the company and the industry. For those findings some of the suggestions made to the company were really applicable for the growth and benefit for the company in order to increase its market share and to become the market leader in the soft drink industry, because a large number of competitors craving for the same market. I got appreciation for the suggestion to the Company.
Thus, finally it can say that the Company needs a lot of improved distribution channel management activities along with various promotional strategies for the customers to get the top position in the soft drink industry. I wish the company to achieve its objectives achieved soon.
Name of the Student: Survey: College & Town:
Name of the shop/owner: A. Address: B. Phone:
What are the Pepsi company drinks are available in your shop? Pepsi 7 Up Evervess Soda Total Mirinda orange Mountain Dew Diet Pepsi Mirinda Lemon Slice Aquafina Water
What are the Coke Company drinks available in shop? Thumps Up Sprite Limca Diet Coke Fanta Kinely Water Maaza Total Coca- Cola Kinely Soda Minute Made
Top brands Purchased by consumer in your shop? 1st ______________ 3rd ______________ 2nd ______________ 4th _______________
What are your Sales in terms of Bottle per day in your shop? A. Total No. of bottles________________
B. Pepsi Bottles Sold ________________ C. Coke Bottles sold ________________ 82
How do you require the Service (supply) by soft drink Companies? A. Daily B. Alternate Days C. Weekly 2 times
Please indicate your satisfaction level with Pepsi Service (supply)? A. Highly satisfied B. Satisfied C. Not satisfied
Please indicate your satisfaction level with Coke Service (supply)? A. Highly satisfied B. Satisfied C. Not satisfied
Trade Schemes offered by which company is good to you? Pepsi Coke
Consumer Promotions offered by which company is good in your opinion? Pepsi Coke
Do you feel T.V advertisements by drink companies help in more sales of Drinks? Yes No
What is the influence of T.V Ads on sales of soft drinks in your shop?
What is Percentage of juice based soft dinks sales in your shop? 30% 20% 10%
Utilization pattern of Pepsi Visi Cooler? Full of Pepsi Drinks Full of Pepsi+ Coke Drinks Pepsi Drinks+ Other Packs
Why did you keep other products in Pepsi Cooler? Electrical Bill No Own Cooler
What is the percentage contribution of soft drinks business in your total business? _____________________________________________________
What is the shop keeper suggestion to improve Pepsi Company Sales in 2009? _____________________________________________________
Soft Drinks are mostly consumed by whom? Male Female by All by Youth
What is the mode of payment to purchase the soft drinks? Pepsi Coke Cash Cash Credit Credit
What is the percentage of consumption of soft drinks at your shop and consumer residence? Shop Home
S.No Author Title Publisher Volume Year
Prentice, Hall of India
VS Ram Swami Chunawalla S.A
Mac Millan Hall of India
Journals Referred Journal Name
Indian Journal of Marketing The ICFI journal of Marketing Management
XXXVIII VI, No.1
Web Sites Referred:
WWW.Pepsi.com WWW.pepsiindia.com WWW.coke.com