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Dissertation Report On At: Lumbini Beverages Pvt. Ltd. Hajipur
Dissertation Report On At: Lumbini Beverages Pvt. Ltd. Hajipur
On
“A Brief study on Effectiveness of Channel of Distribution
of Pepsi Products in Patna”
At
Lumbini Beverages Pvt. Ltd.
Hajipur
Under Guidance
Mr. Manish Sahay
[Market Developing Officer PEPSI, Patna (Bihar)]
Submitted To Submitted By
Mr. Rahul Saxena Kunal
(Class Coordinator) PGDM – III (B)
Roll: - 11
Kunal
Academy of Management Studies
Dehradun
(Kunal)
(Kunal)
Title
Questionnaire
When Mr. Rajeev Gandhi came into the power as Prime Minister of India, then it
was expected the liberalization of Indian economy. This was the expectation of his
modern concept regarding every walk of life. When Pepsi has appealed on our collective
consciousness of few years ago to be more exact in April 1989. When it set up operation
for beverages snack foods and export business. The establishment of Multinational
Company Pepsi was supposing to prediction in present Indian business scenario.
Despite love for ones own motherhood and traditional concept of Indian people it
was assumed that it is very hard to make and create taste and preference about soft drinks
but despite of having so many confusion, no one was able to assume such a wide
acceptance and it was PepsiCo. Who could be able to penetrate in Indian soil and it was
the Pepsi that has got not only a place in Indian hospitality, but also taken place of
traditional sharbat of lemon and sugar. And needless to say “Generation next has become
the slogan of the day.”
The first managing director was Mr. Ramesh Vanagal but present is Mr. P.M.
Sinha in India. During these years beverages begin an exclusively franchise operating
beverages now has five company owned bottling operation (COBO) the business expects
to grow three times faster than the industry growth rate 1995 and its vision is to become
INDIA’S BEST CONSUMER PRODUCT COMPANY in all aspect. The snacks
business has seen some major success and going for leadership too. Pepsi is a leader in
the snacks food business. The division plans to introduction wide range of snakes in to
Indian market in the next three years. The restaurant business has also come Kentucky
Fried Chicken (KFC) has opened its first outlet at Bangalore Pizza but it also expected to
open restaurants shortly city wise. Whole of the operations of Pepsi in India has made a
rapid change in Indian life style, which is resulting in fast food life.
Pepsi is a world leader in restaurant & soft drink whether it is in London or in
Ludhiyana, America or Ahamedabad, Berlin or Bombay, Paris or Patna, Manchester or
Madras.
Management is a course which teaches the student to get the work done properly
from different available sources viz. man, machine, material, money etc. So there can be
a satisfaction from the organization side and the workers side who play a significant role
in achieving success. So far the fulfillment or the management course, it gives emphasis
to project work and students learn how to plan in practical terms rather in terms of theory
only. Student tends to develop analytical and problem solving skill. We necessary
become motivated and competitive, in fact all the learning that goes on for the two year
term become so much the part of our thinking that we developed a well all rounded
personality.
The following are the objectives and purpose of the study-
i) For the fulfillment of Post Graduate Diploma in Management (PGDM)
programme as realized by the Academy of Management Studies,
Dehradun. (AICTE approved)
ii) To care and contact with the working of an organization and to see the
different types of marketing activities. The main emphasis is on the
distribution Channel aspect of the organization.
iii) Whatever the subject taught in the class room of PGDM course that is
completely theoretical. So during the training period we compare how the
marketing research (sales) activities (practical) of our organization with
the theories.
iv) Find the depth and width of distribution channel adopted by Lumbini
Beverages Pvt. Ltd. Hajipur and compare them with those followed by
competitors.
v) To ascertain the consumer brand perception of cold drinks with respect to
price, product, quantity and advertising.
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History Of Pepsi
Production Process
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PepsiCo is a USA based company having its head quarters at New York with the
net worth of $30-40 million. The average sales of the company are approx 90 million
bottles per month. Pepsi made it first international move in Russia in 1959. During the
Khrushchev era, within 32 years Pepsi emerged as the biggest competitor for Coca Cola.
Pepsi is available in 155 countries.
In any soft drink, on the globe Pepsi food is one of the largest soft drink
companies in the world with its headquarters in New York. It was invented by Pharmacist
Culab D. Baradham in 1898 to cure the disease “Dyspepsia”. It is from this word that its
name was related to Pepsi. Soon it entered the American market as soft drink, which at
that time mostly dominated by Coca Cola, but soon Pepsi able to dominate the Cola
market, and there after it never looked back. Pepsi and Coca Cola are engaged in
ferocious cola war that has taken the whole world by storm.
Pepsi entered the Indian soft drink in Kanpur in 1988 and began its production in
May 1990 and soon it was giving the local contenders run for their money in soft drink
market. It comes out with dazzling marketing innovation that rocked the cola market, like
selling the product through function Pepsi outlets. Its advertisement agency was
“Hindustan Thomson Association” (HTA). Its advertisement budget for 1995-1996 was
valued at Rs. 24 crores which is likely to be increased manifold in coming years.
Pepsi food is one of the largest and best foreign investments in India. Till today it
has invested Rs. 500 crores in India to develop the local market. Pepsi has distributed
exclusive franchises in India to bottle its total product. There are 28 bottling plant of
Pepsi in India. Some are directly controlled by Pepsi and rest is under various
franchisees.
Pepsi stands 51st position among the fortune 500 companies of the world. Its total
capital is approx $3000 crores and total sales annually is worth $37 crores. Its total profit
in the year 1996-97 was worth Rs. 458 crores approx. The total number of employees
engaged in the business is 45.25 lakhs globally.
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The process of manufacture of Aerated water (soft drink) like Pepsi brand product is
divided into mainly five parts such as
1. Water Treatment
2. Syrup Making
3. Bottle Washing
4. Filling
5. Testing of Product
(1) Water Treatment: - Water treatment is very essential in soft drinks plants as
the nature and quality of water varies from place to place. To set uniform and
standard water the process of treatment is carried on. The water taken out from
bore well by the help of motor pump and pipe line are collected in storage tank
where is pre chlorinated by chlorinators and by the help of pipe lines comes to
treatment tank called coagulation tank where to this water solutions of different
strength of bleaching powder, ferrous sulphate, hydrated lime are added through
dosing pump to reduce alkalinity, hardness, kill the bacteria .The chemical are
mixed by mechanical stripper and then the suspend mattress settle down as
sludge and clear water passes to retention tank. From this tank, the water passes
through sand filter containing fine sand and pebbles and carbon filter containing
granular carbon and finely through water polisher, micron filter, and UV lamp to
ensure clear and sanitary water for use. Further water used in bottle washer and
boiler need softening .for this purpose ,the water from storage tank ,after passing
through two filter beds contain fine sand and granular carbon respectively comes
to pass through bad resin were it is softened .this soft water is essential to use in
and bottle washer to reduce scale formation inside the machines.
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(3) Bottle Washing: Bottle washing is an important part in soft drink plant. The
empty durable and returnable bottle used are returned from market in plastic
carats are fed to a bottle washing machine (washer). The machine has double end
system with circular chain to carry the bottles. Caustic soda Tri-Sodium
Phosphate, Sodium Glausonate is adding to the caustic by the supplied. The
Caustic tank filled in with water heated by steam supplied by the boiler. The
empty bottles enter to the hot Caustic tank in one end and after being cleaned by
hot Caustic solution and finally washed with water through spray jets fitted are
discharged in other end. The washed bottle proper inspections are SU 319 and
SU 853 used for conveyor cleaned and smooth running of chain carrying bottles.
SU 260 and SU 773 is used for bottle cleaning, shining, and mold removing.
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(5) Testing of product:- Finally the finished syrup during bottle is tested in
laboratory to meet the parameters and also to get a standard and quality products
to maintain the standard and information and uniformity in products the sugar
contents and carbonation in the bottle are checked in regular intervals by Brix-
hydrometers, Refrectometer and pressure gauge. The dead weight tested is used
to calculate pressure gauge to know the correct pressure. TA & Ph are tested by
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PREPARATION OF SYRUP
Treated water + Sugar = Flavour
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The product manufactured by “Lumbini Beverages Pvt. Ltd. are very limited
ranges as it is not independent to diversity its products. It is a unit of Pepsi food Pvt. Ltd.
which supplies concentrates for drinks. They are:-
CONSUMERS
The main consumers of these products naturally are youth. Besides the direct
consumer it is also used for the some purpose of providing it to the mass by hoteliers,
restaurant owners and various other soft drink peddlers. These products are the choice of
the new generation. Thus it can be said that it is a product of mass consumption.
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ORGANIZATIONAL STRUCTURE
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BOARD OF DIRECTOR
MANAGING DIRECTOR
CEO
SHIPPING
A/C SHIFT ENGINEER COORDINATOR H.R.
ASSISTANT EXECUTIVE
WORKER /
A/C CLERK OPERATOR H.R.
ASSISTANT CLERK ASSIS.
HOS
The marketing manager is assisted by sales executives, city sales executives and
rural sales executives and sales executive of shipping department as follows:-
DIRECTOR
MANAGING DIRECTOR
HEAD OF SALES
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Channel 1. Manufacturer………………………………………………..…Consumer
Channel 2. Manufacturer……………Retailer……………………………Consumer
Channel 3. Manufacturer……...Wholesaler………….Retailer…………Consumer
Channel 4. Manufacture…….Wholesaler……Jobber……Retailer…….Consumer
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Distribution channel do not stand still. New wholesaling and retailing institution
emerge and new channel system evolves. There are four types of marketing channels.
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1. Specialty Store: - They sell narrow product line with deep assortment.
2. Departmental stores: - They sell several product line with each line operated
as separate department managed by specialist buyers or merchandisers.
3. Super market: - They are relatively large, low cost, low margin, high volume
self service operation designed to serve total needs for food, laundry and
household maintenance product.
4. Convenience Store: - These are relatively small store located near residential
areas, open long hours, seven days a week and carrying an united lines of high
turn over convenience products at slightly higher prices.
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Distributors
Dealers
Consumers
At first the soft drinks supplied to the distributors directly. Retailers or owners of
any outlet can not take the delivery from company. They have to take the products from
their respective or nearest distributor.
There are about 50 distributors and innumerable number of retail outlets operating
with the company in its entire market areas which contains total Bihar. In all the
important places of entire territory this company has its distributors.
These distributors selected on the basis of assurance given by them regarding the
minimum sales which they have to maintain annually. The selection is also done on the
basis of the financial position and reputation of distributor in the market. As for example
in appointing a distributor first engaged in soft drink business second priority is given to
those people who are in cigarette selling business. Depending upon the market, each
distributor in the initial stage has to deposit some security money.
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(2) Wholesaling
Wholesaling includes all the activities involved in selling goods or
services to those who buy for resale or business use. Manufactures use
wholesalers because wholesalers can perform function better and more cost
effectively than the manufacture can. These functions are not limited to selling
and promoting, buying and assortment building bulk barking, warehousing,
transporting financial risk bearing dissemination of marketing information and
provision of management services and consulting.
Like retailers wholesaler must decide on target market, product assortment
and services promotion and place. The most successful wholesalers are those who
adopt their services to meet and target customer’s needs, recognizing that existing
to add value to the channel.
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All marketer retailers must prepare marketing plans that include decision on target
market.
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In deciding to transporting models shippers can choose from private contract and
common carriers.
Transport decisions must consider the complex trade off between various
transportation mode and their implications for other distribution elements such as
warehousing and inventory.
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Channel 1. Manufacturer…………………………………………………Consumer
Channel 2. Manufacturer……………Retailer…………………………..Consumer
Channel 3. Manufacturer………Wholesaler………….Retailer…………Consumer
Channel 4. Manufacture…….Wholesaler……Jobber……Retailer……..Consumer
By Lorry or Truck
Distributor
Dealers of customer
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There are more than eight hundred including exclusive and nonexclusive outlets
of Pepsi in proper Patna. The highest sale of this year __________ cases was in the
month of May and total sale of this year was……………..cases so far.
Hierarchy is also necessary to understand the capacity of Patna town.
HIERARCHY OF PATNA
Distributor
Consumer Executive
Sales Man
Accountant
Vehicle
Loader and Unloader
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Product line is a group of product, that are closely related because they satisfy a
class of needs or used together or sole to the same customer groups or marketed through
the same types of outlets or fall within given price range. Lumbini Beverages Pvt. Ltd.,
has the following product line:
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The retailers can build a great deal of goodwill for the firm. The marketing
strength depends on the strengths of retail dealers.
Research has conduct survey on different types of outlet like bakeries, cold drink
parlor, Booth and general stores etc.
According to his survey, the major reasons for selling Pepsi products are:
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Flavour % Consumption
Cola 49%
Orange 16%
Lemon 12%
Lime 07%
Mango 17%
15%
17% C
49%
O
L
L
M
7% 7
12%
16%
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The data has collected from 100 outlets, which are situated in different areas of
Patna. According to that, the per day sale of Pepsi Products is 154 carats and the per day
sale of sale of Coke Products is 148 crates.
Coca Cola
48% Pepsi
Pepsi Coca Cola
52%
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From the data analysis and survey conducted by me, I arrived at the following
conclusions:-
(1) Pepsi has the entire flavor i.e. Cola, Leman, Orange, Mango in the market and its
market share is comparatively more than Coke.
(2) The majority of the retailers deal in all brands of Pepsi and Coca-Cola.
(3) One of the major drawbacks of Pepsi products is that all the flavors do not reach
at each and every retail outlets but competitors products do reach that is why competitor
enters in to Pepsi exclusive outlets .
(4) The major problem faced by the distributor is the shortage of supply particularly
pets.
(5) Distributor functions just as order takes; they should contribute me and
communicate to the retailers.
(6) It should be checked that whether our products is reaching to the outlets timely
and regularly or not.
(7) Although the Visi-cooler, Sign board/Display rack and Glass strength provided
by Pepsi are more than Coke but still there are number of retailers, who are either not
having these or others have provided them .
(8) There is irregular in the supply of Visi-cooler, some retailers, which sell more
are not provided Visi-cooler which some retailers, which sell less, are provided visi-
cooler.
(9) Some of the Visi-cooler provided by Pepsi is not functioning properly,
complaints regularly, are entertained after a long time.
(10) Most of the retailers are in need of board but not provided by the Pepsi
Company.
(11) Most of the retailer’s especially small retailers have complained that the sales
man does not inform about any sales promotional scheme.
(12) The big retailers of Pepsi do not maintain the purity in the Visi-cooler and
dictate their own terms and conditions.
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2. A clear notification should be given to teach distributor and each route agent to
give cash memo (with printed number) and maintain route card for every
transaction.
3. Proper care should be given the company’s employees at the time of scheme
close. Signature of scheme receiving on the cash memo should be taken and it
should be also maintained in route card. Claim of scheme should be passed after
the deeply stud y of above three points i.e. difference between opening stock and
closing, signature of scheme receiving on the cash memo and sells maintained in
the route card.
4. Some retailers keep other companies products in the Pepsi’s fridge, while is
provided by the company. To check additional scheme be given in every month,
in the peak seasons After the checking of Pepsi’s Fridge (3or 4 times in every
month ) if It is found that retailer does not keep other companies products in the
Pepsi’s Pepsi fridge the claim of scheme should be passed . Thus we can
improve/increase its sell and employee’s activities.
5. There is no electricity problem in the whole area of Patna. For chilled soft drink,
ice box which is compulsory and dredge both should be provided by the
company.
6. The numbers of outlets are too much. So it is required to short the route and extra
vehicles/tricycles provide in this route.
8. Number of tricycle can be installed at various place like public during the peal
hours i.e. evening and busy roads and chowks near the town`s commercial
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9. All these tricycles targeted the tired and thirsty consumer or the road and other
place, care should be taken that soft drinks in the ice box are always chilled and
ice readily available.
11. The vendors can also be provided with uniform by the company in order to give
them visibility.
13. In winters, as the sales from these tricycles may be very low because of seasonal
factors Beverages Pvt. Ltd. should think of introducing such packs Beaver its
various brands of beverages .
14. It is vital take for “Lumbini Beverages Pvt. Ltd. that maintain the performance
of Pepsi in future therefore performance of soft drink was very good in this year
in comparison of coke.
15. Now a day with the introduction of tetra packs such as fruity, Tree Top etc. So
Lumbini Beverages Pvt. Ltd. should think of introducing such packs of its
various brands of beverages.
16. Lumbini beverages Pvt. Ltd. should be provided it’s the rural area also.
17. Coke is the only competitor of Pepsi. So we should try to keep every information
about Coke i.e. prices scheme, policy etc. always it will help in Decision making.
At last only this can be said that these suggestions are mot totally but even
partially can be used by the Lumbini Beverages Pvt. Ltd. it would be pleasure for me and
is certain that if these are carried out by management , it will helpful in establishing the
Lumbini Beverages Pvt. Ltd. on a more stronger footing.
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Place:-…………………… Surveyed by
Date:- ……………………
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