Marketing Strategy analysis of Bottlers Nepal Ltd.

SUBMITTED BY:
HARI GOYAL
UNIVERSITY ROLL NO.: 1308011877
COLLEGE ROLL NO: 1307201317

A PROJECT REPORT SUBMITED TO

HEAD OF THE DEPARTMENT
COLLEGE FOR PROFSSIONAL STUDIES
LC OF SIKKIM MANIPAL UNIVERSITY

IN PARTIAL FULFILLMENT O F THE REQUIREMENT FOR THE AWARD OF

THE DEGREE OF

MBA IN MARKETING
KATHMANDU NEPAL
 Table of Contents
Chapter 1 ............................................................................................................................................5
INTRODUCTION .............................................................................................................................5
1.1 Introduction .............................................................................................................................5
1.2 BACKGROUND OF STUDY .........................................................................................................6
1.3 BACKGROUND OF ORGANIZATION ..........................................................................................8
1.4 Statement of Problem ............................................................................................................10
1.5 Theoretical Framework .........................................................................................................12
1.6 Objective of Study ..................................................................................................................12
1.7 Significance of Study .............................................................................................................13
Consumers are the god of the market, so consumer's satisfaction is the main motto of any
organization or producer. Success of any industry depends on the function of successful marketing
of the products demands a through understanding of consumers taste, choice, ability, preferences
and consumption behaviour. For getting this information's about consumer, market studies are
conducted from time to time. It is very essential for the manufacturers and marketers of the
products to know the buying behaviour of target customers to achieve its goods. Therefore, the
research will occupy the following importance. ..............................................................................13
1.8 Limitation of Study .................................................................................................................13
1.9 Organization of Study ............................................................................................................14
Chapter 2..........................................................................................................................................15
Review of Literature.........................................................................................................................15
2.1 Conceptual Review.................................................................................................................16
2.1.1. Market ............................................................................................................................16
2.1.2 Marketing ........................................................................................................................17
2.1.3. Marketing Mix ................................................................................................................18
2.1.3.1 Product: ................................................................................................................................21
2.1.3.2 Place .....................................................................................................................................22
2.1.3.3. Promotion ............................................................................................................................23
2.1.3.4 Price .....................................................................................................................................23
2.1.4. Marketing Strategy ........................................................................................................24
2.1.4.1 Product Strategy ...................................................................................................................26
2.1.4.2. Pricing Strategy: ..................................................................................................................28
2.1.4.3 Distribution Strategy ............................................................................................................29
Distribution Channels ......................................................................................................................30
2.1.4.4 Promotional Strategy............................................................................................................32

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 2.1.5 Marketing System ...........................................................................................................33
2.1.6 Marketing Environment ..................................................................................................33
2.1.7. Role of Marketing in Industrialization............................................................................35
2.1.8. Introduction of Advertising ............................................................................................36
2.1.9. Introduction of Promotional Activities ..........................................................................37
2.1.10 Marketing Channels ......................................................................................................38
2.2 Review of Previous Studies in Nepal ......................................................................................41
2.2.1. Pathak, Krishna Prasad, "Coffee Marketing system in Nepal" .......................................41
2.2.2 Thapaliya, Anup Kumar, "A study in Market situation of Instant Noodle Yum Yum in
Kathmandu" .............................................................................................................................42
2.2.3. Lmichhane, Hari "Marketing of Cold drinks in Kathmandu" ..........................................43
2.2.4. Bhatta, Shree Chandra. "Sales Promotion and its effect on sales: A case study of Beer
Market of Nepal. ......................................................................................................................44
Chapter-3 .........................................................................................................................................46
Research Methodology ....................................................................................................................46
3.1 Research Design .....................................................................................................................47
3.2 Population and Sample .........................................................................................................48
3.3 Nature and Sources of Data ...................................................................................................48
3.4 Data Collection Procedure .....................................................................................................48
3.5 Data processing and analysis .................................................................................................49
Chapter- 3 ........................................................................................................................................50
Data Presentation and Analysis .......................................................................................................50
4.1 Consumer's Survey .................................................................................................................50
4.1.1 Consumer's Profile ..........................................................................................................51
4.1.2 Most Preferred time for taking Coke drink .....................................................................55
4.1.3 Suitable Place for having Coke drink ...............................................................................55
4.1.4 Reason for having Coke Drink .........................................................................................56
4.1.5 Size of Coke drinks most Preferred .................................................................................57
4.1.6 Factors that influence to have Coke drink ......................................................................57
4.1.7 The most effective advertising media .............................................................................58
4.1.8 Frequency of Purchase of Coke drink. ............................................................................59
4.1.9 Participation in the process of Coke drink ......................................................................61
4.1.10 Reasons for Changing Brand .........................................................................................62
4.2 Retailers Survey......................................................................................................................63
4.2.1 Year in Business...............................................................................................................63

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 4.2.2 Retail Sales of Coke in per day ........................................................................................64
4.2.3 Size of bottles sold most .................................................................................................65
4.2.4 Type of Packaging preferred for selling ..........................................................................65
4.2.5 Satisfaction from the Distribution...................................................................................66
4.2.6 Reason for Preference to sell the Brand .........................................................................68
4.2.7 Influence of advertising on sales.....................................................................................68
4.2.8 Factors for Increase in sales of Coke ...............................................................................69
4.2.9 Sales Promotion Schemes to induces Sales ....................................................................70
Chapter- 5 ........................................................................................................................................72
Summary, Conclusion and Recommendations ................................................................................72
5.1 Summary ...............................................................................................................................72
5.2 Conclusion ..............................................................................................................................73
5.3 Recommendations ................................................................................................................75
Bibliography .....................................................................................................................................77
Appendix ..........................................................................................................................................79

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 Chapter 1

INTRODUCTION

1.1 Introduction

Coca-Cola, imported from India, was first introduced into Nepal in 1973, with local
production of Coca-Cola beginning in 1979. Bottlers Nepal Limited (BNL) is the
only bottler of Coca-Cola products in Nepal, and has two bottling plants; namely
Kathmandu (Bottlers Nepal Limited – BNL) and Bharatpur (Bottlers Nepal (Terai)
Limited,) which is 160 km from Kathmandu, its capital. The Marketing, Sales &
Distribution strategy for Bottlers Nepal Limited is entitled “Refresh the
Marketplace” and includes: A robust Consumer Response System to address any
consumer/customer concerns, ideas, suggestions – either on product and its quality
or on stock supply – maintenance of equipment etc. All consumer concerns are dealt
with in a fair, timely and friendly manner, so as to satisfy them and resolve their
concerns.

Marketing and advertising communications are focused on POS (point-of-sale),

Radio, TV, hoardings, truck backs, etc. Emphasis is also placed on Consumer Price
to enforce Price Compliance.
Marketing and advertising communications are customised to suit to local
sentiments – social, religious, ethnic. Innovative packages and pack sizes are offered
to give better value to consumers and ease of storage to retailers. Prices and packs
are introduced in a format that is affordable to all segments of society. The approach
by the Nepal operation to environmental issues is guided by a simple principle to
conduct their business in ways that protect, preserve and enhance the environment.

The fully automatic Effluent Treatment Plants (ETP) are established in both its
plants and have been operational since 2001, to protect the local environment as well
as meet the standards of The Coca-Cola Quality System (TCCQS). BNL is
committed to strengthening the community through various programmes. at the
forefront is the health sector. With the lowest per capita public health expenditure in

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the world, the state of medical facilities available to the poor in Nepal is abysmal.
The country is affected by outbreaks of communicable diseases because hygiene and
sanitation facilities are scarce. In association with the local community, BNL
supports Free Health Check-up Clinic at Bharatpur. The health centre is managed by
a qualified MBBS Doctor and trained paramedics, who extend free check-ups to
communities around the plant in the area. The facility has thus far helped hundreds
of families get the best medical attention locally. Senior citizens and children are the
main beneficiaries.

1.2 BACKGROUND OF STUDY

Every firm wants to maximize the value of the firm. For every product to be known
by the customers, it is important that information regarding that particular product is
reached to the customers. And the process by which the information is relay to the
customers are done through the advertisement. Advertisement is a medium to relay
information to the customer about the existing products in the market.

In ancient China, the earliest advertising known was oral, as recorded in the Classic
of Poetry (11th to 7th centuries BC) of bamboo flutes played to sell candy.
Advertisement usually takes in the form of calligraphic signboards and inked papers.

In the 18th century advertisements started to appear in weekly newspapers in

England. These early print advertisements were used mainly to promote books and
newspapers, which became increasingly affordable with advances in the printing
press; and medicines, which were increasingly sought after as disease ravaged
Europe. However, false advertising and so-called "quack" advertisements became a
problem, which ushered in the regulation of advertising content.

Industrialization is an important factor for achieving basic objectives of a country’s

economic and social progress. Industrialization is considered as an essential for the
economic development of the country. It facilitates on effective mobilization of
resources such as capital and skill, which might otherwise remain unutilized. It also
acts as a vehicle for fostering innovation and technological improvement for
industrial development, thus, has a multiplier effect on the economy.

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Industrialization is a comparatively new phenomenon in Nepal. Industrial
development in Nepal however started getting regular attention of the government
since the development plans was started. Several industries were established under
the public sector with the technical assistance of foreign countries were seen in
existence in the public sector also. But the financial position is not growing as the
growth of the numbers.

The objectives of all business are to makes profits and a merchandising concern can
do that by increasing its sales at remunerative prices. This is possible, if the product
is widely polished to be audience the final consumers, channel members and
industrial users and through convincing arguments it is persuaded to buy it. Publicity
makes a thing or an idea known to people. It is a general term indicating efforts at
mass appeal. As personal stimulation of demand for a product service or business
unit by planting commercially significant news about it in a published medium or
obtaining favourable presentation of it upon video television or stage that is not paid
for by the sponsor.

On the other hand, advertising denotes a specific attempt to popularize a specific

product or service at a certain cost. It is a method of publicity. It always intentional
openly sponsored by the sponsor and involves certain cost and hence is paid for. It is
a common form of non- personal communication about an organisation and or its
products idea service etc. that is transmitted to a target audiences through a mass
medium. In common parlance the term publicity and advertising are used
synonymously.

Manufacturing means any industries that make product from raw material by the use
of labour or machinery, which is usually carried out systematically with a division of
labour. BNL is one of the manufacturing and processing companies of soft drinks,
which supplies sufficient quantity of quality products at the right time at reasonable
price. In the context of globalization, companies are free to enter the market of any
nation. If the finished products are not sufficient to meet the demands of the
customers regularly, the customers may shift to the other close substitutes resulting
into permanent loss of the firm, but BNL has handled this challenge in an efficient
way.

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1.3 BACKGROUND OF ORGANIZATION

Coca-Cola is one of the world leading and largest Company in the sector of
beverages. It was established in 1886 by Dr. John Pemberton who was a pharmacist
of Atlanta, Georgia USA. The brand has since become household drink in more than
200 countries across the world. Carbonate drinks are the single largest component in
Coca-Cola Company which account for nearly 78% of the total volume sold in 2008.
The company has more than 3000 products of beverages and has nearly 500 brands
in its portfolio includes Coca-Cola or Diet Coke family, Coca-cola enterprise (CCE).
Likewise, wide range of carbonates including Fanta, Lilt, PowerAde and Sprite.

At first Coca-Cola was introduced in Nepal in 1973, which was imported from its
neighbour country India. Local production of Coca-cola in Nepal was started in
1979, with the establishment of Bottlers Nepal Limited (BNL). Coca-Cola Sabco
was provided the right of bottling from the Coca-Cola Company to Nepal in 2004.

BNL has plants in the capital city Kathmandu and Bharatpur municipality, which is
only the bottler of Coca-Cola products in Nepal.

The Marketing, Sales and Distribution strategy for BNL is mentioned as 'Refresh the
Marketplace' and contain a robust Consumer Response System to deal with the
concerns, ideas and suggestions of the consumers.

BNL is also dedicated to support the community through different programmes,

mainly in the sector of health. In relationship with the local community, BNL also
support by providing a Free Health Check-up Clinic at Bharatpur municipality.

Bottlers Nepal Ltd. Company is one of the manufacturing and processing

companies, which is manufacturing the soft drinks under the brand name of the Coca
Cola Company. The company also makes the sales of the soft drinks under the
registered trademark of the Coca Cola Company that is managed by Singapore based
F & N Coca Cola Pvt. Company Ltd. Its registered office is located at Balaju,
Kathmandu, and the head office being the same.

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The Company is located in Balaju in an area of 10,648 sq. m. of space and the
buildings of the company covers 5,823 sq. m. The company covers roughly 90% of
the Nepalese market when compared with other brands of the similar products.
This figure is inclusive of the subsidiary c.o.’s figure (Annual Report BN Ltd)
Share Capital of the Company: The company has authorized share capital of Rs.
500,000 thousands and paid up value per share is Rs. 100/-, and issued capital of
Rs. 370,000 thousands among shareholders. The paid of capital is Rs. 194,889
thousands and value per share is Rs. 100.

BN Ltd is one of the good company listed in the NEPSE in terms of the
market capitalization. This company produces fine varieties of soft drinks that
are Coke, Fanta, Fanta Lemon, Lime, Sprite, Soda and drinking water. This
company is managed by F & N Coca-Cola Pvt. Company Ltd. Based in
Singapore in Nepal; there are two factories under Coca-Cola Company. This
study is about Bottlers Nepal Limited located at Balaju. There is also subsidiary
company known as Bottlers Nepal (Terai) Ltd. at Chitwan District of Nepal.

The company has authorized share capital of Rs.121,000,000 and paid up value per
share is Rs.100. The issued paid up capital is Rs.121,000,000. Initially local
management till 1993 A.D. run the company. Frase and Neave Singapore took
responsibility of the company management form 1993 to 2000 A.D. During the year
2000-2004 the company was run by the Coca Cola, Atlanta. At present South Africa
Bottling Company, South Africa is taking the Responsibility of company
management.

The company prepares flavor the product. They are brought from countries like
Singapore, India and Germany. All the spare parts are imports from Germany,
Thailand, Switzerland and India also. BNTL covers more than 75% market in Terai
region when compared with other brands of the similar product. The company has
been able to win the heart of the customers without increasing the price of products
since two or three years ago.

The company employing 158 persons has a plant with the capacity of producing 350
bottles per minute. Coke, Sprite, Fanta, Slice (orange, lemon and soda) are the major

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product of the company, packed in 2000ml, 1500ml, 1000ml and 500ml non
returnable plastic bottles and 750ml, 250 ml and 175ml returnable glass bottles.

BNL has continuously increased the production target. The machine operates 3
shifts in peak season and according to the demand of stock season 90% of the
operation is carried in full season and 10% of the operation is done in off-season.

For the production of these products certain inputs are pre-requisites i.e. concentrate,
crown cock, closure and sugar which are not produced in the country. Therefore
these inputs are imported from other countries like Singapore, Iran, Pakistan,
Indonesia, German and India.

The company had given prime importance to its quality product for which it had
established well-equipped laboratory to assess the quality of raw materials as well as
finished product. Similarly the company had also shown its concern to guarantee the
safer environment by establishing Effluence Treatment Plant (ETP) in 1999 to refine
the waste water generated in the production process.

1.4 Statement of Problem

Marketing is of great importance for any business activity as it attracts people to use
the particular service. Most of the businessmen are using various different means of
communication to reach people around the world and turn them into leads that can
be further turned into potent customers. There are various ways of putting up an
advertisement as per the audience to be addressed. Most people use to look for these
marketing strategies very carefully observing carefully the specifications and
efficiency of the featured product. However, it’s impossible for someone to get the
reality check through these advertisements, so in order to get clearer idea about a
particular service one must go for people’s feedback about a particular product or
service and these feedbacks must also be genuine as some of them maybe done for
fake publicity.

Marketing is the best way to communicate to the customers. Marketing helps

informs the customers about the brands available in the market and the variety of
products useful to them. Marketing is for everybody including kids, young and old.

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It is done using various media types, with different techniques and methods most
suites.

Coke and coke are mainly two competitors in cold drinks market in Nepal. The
prestigious growth of the market between these cola giants has been growing ever
since Coke to Nepal in 1986. Since coke entered Nepal in 1997, it had been enjoying
market leadership in soft drink industry. So, coke had a sort of monopoly in the
market till then. The stiff competition in the marketing of these products has forced
the marketers to adopt a variety of marketing tools and techniques in the market
place. The manufacturers of Coke in variety of media use different types of
advertisement. Also, it is very essential for company to know about their
consumer's, their choice and purchasing behaviour. For regular sales and distribution
of Coke in the study area we must know about' which is the best advertising media,
which advertising media can be more effective? Therefore, this research starts with
the following problems.

1. What is the purchasing behaviour of consumer's of Coke?

2. Which are the most effective factors that consumers consider while making
buying decisions?
3. What type of impacts have the advertisements made on the sales of Coke in
study area?
4. What is the effect of sales promotions schemes on sales of Coke in the study
area?

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1.5 Theoretical Framework

One of the sensitive factor or element in the branding of the product is marketing.
Businesses frequently use advertising to show how their product has more benefits,
or is more effective, than similar competitor’s products. In some cases, the retailer
feels it is necessary to advertise because the competition is blanketing newspaper
pages or television airwaves with its own ads. Unless other market retailers that
aggressively highlight their own products, they are likely to be overlooked in the
minds of consumers.

When a business introduces a new product, advertising provides a means to make a

large market aware of the product. Ads often focus on the product solution to a
common problem, such as a new cell phone touted ability to solve the problem.

Marketing provides an effective way to inform the market about limited-time

product sale events. Sale-based ads can be generated by local retail outlets, or can
originate from the product national manufacturer. Businesses use advertising to
accomplish varied goals and companies place those ads in diverse media. Besides
advertising products in traditional venues such as newspapers and general interest
magazines, businesses advertise in media that reach specific markets. For example, a
portable communications device is advertised on a social media site that reaches
younger customers.

1.6 Objective of Study

The main objective of the study is to analyze the Marketing strategy of Bottlers
Nepal Ltd. regarding soft drinks and its effect on the sale. This study is to point out
the availability, consumption and marketing aspects of Coke in Kathmandu
municipality. Relating to this, the study has the following objectives.

1. To identify the consumer's profile in the purchase of Coke in Kathmandu.

2. To evaluate the impact of advertisement and sales promotion schemes on the
sales of Coke in the study area.

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 3. To evaluate the factors that influence consumer purchase decision.
4. To find out the popular media of advertising for Coke in the study area.

1.7 Significance of Study

Consumers are the god of the market, so consumer's satisfaction is the main motto
of any organization or producer. Success of any industry depends on the function
of successful marketing of the products demands a through understanding of
consumers taste, choice, ability, preferences and consumption behaviour. For
getting this information's about consumer, market studies are conducted from
time to time. It is very essential for the manufacturers and marketers of the
products to know the buying behaviour of target customers to achieve its goods.
Therefore, the research will occupy the following importance.

The significance of study is listed as follows:

● Crucial for a launch or announcement.

● Helps in increasing the sale.
● Create consumer awareness.
● Target oriented.
● Builds brand image.
● Persuade people
● Reinforce past purchase and brand experience

1.8 Limitation of Study

The main focus of this study is to point out the marketing strategies of BN Ltd.
Company. So the conclusion is based on the available primary data as well as secondary
data that might not be correct in reality. Similarly conclusion of this study might not be
application to other manufacturers because of the possibility of the gross variation in data.
However, following factors are the limited scope of the study.

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  The information collected from agencies and companies is corrected by
persuading the concerned agencies as they are not generous to provide the
information.
 The qualitative aspect of research is the effect of advertising to persuade
customers to buy the Bottlers Nepal Ltd soft drinks and it cannot be
quantified.
 It is purely a study of users of Bottlers Nepal Ltd soft drinks, in Kathmandu
only.

1.9 Organization of Study

The whole research is organized into five main chapters, which are as follows:

Chapter 1: Introduction

It includes the introduction & background of the study, statement of problem,

Rationale/Justification of the research, objectives of the research and limitation of the
research.

Chapter 2: Literature review

Second chapter is 'Review of literature' which consist of conceptual framework which

includes meaning of dividend, theories of dividend, forms of dividend, dividend
policy, and Review of Major international studies/models, review of major national
studies and review of unpublished thesis

Chapter 3: Research methodology

This chapter consists of introduction of research methodology, research design, nature

and source of data, population and sample, data collection techniques and data analysis
tools.

Chapter 4: Presentation and analysis of data

It is data presentation and analysis part; it is the main body of the study. It includes
data presentation, interpretation and analysis. Mainly Secondary data will be analyzed
in this chapter.

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 Chapter 5: Conclusion

It includes the summary and conclusions of the study and recommendations for further
studies.

Chapter 2

Review of Literature

Review of literature is the study of concept and theories as well as review of previous
research and their findings. The purpose of reviewing the literature is to develop some
expertise in one's area, to see what new contributions can be made, and the receive some
ideas for developing a research design.

Scientific research must be based on past knowledge. The previous studies cannot be
ignored because they provide the foundation to the present study. In other words there has
to be continuity in research. This continuity in research is ensured by linking the present
study with the past research studies.

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Thus, the purpose of literature review is to find out what research studies have been
conducted in one's chosen field of study, and what remains to be done.

2.1 Conceptual Review

In this part, concept of the topic and its related meaning are presented, which help to know
the research and its findings. In this study, conceptual review includes market, marketing,
marketing mix, marketing strategy marketing system, marketing environment, role of
marketing in industrialization, introduction of advertising, introduction of promotional
activities and marketing channels.

2.1.1. Market

There are many usage of the term in economic theory, in business in general and in
marketing in particular. A market may be defended as a place where buyer and sellers
meet, product or service is offered for sales, and transfer of ownership occurs. "A market
consists of all the potential customers sharing a particular need or want who might be
willing and able to engage in exchange to satisfy that need or want." A market may also be
defined as the demand made by a certain group of potential buyers for a product or
service. "A market represents the aggregate demand of the buyers and potential buyers for
a product or services over a specific period of time." Market is defined as people or
organizations with wants, to satisfy, money to spend and willingness to spend it. Thus, in
the market demand for any given product or service, there are three factors to consider.
People or organization with wants their purchasing power, and their buying behaviour.
Market is a group of individual organization who may want the goods or services being
offered for sale and who meet these three additional criteria.

i. Members of a market must have the purchasing power to be able the product
being offered.

ii. Market members must be willing to spend their money or exchange other
resources to obtain the product.

iii. Market members must have the authority to make such expenditures.

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2.1.2 Marketing

Marketing is the economic process by which goods and services are exchanged and their
values determined in terms of money prices. "Marketing is concerned with regular the
level, timing, and character of demand for one or more products of an organization.
"Marketing consists of all business activities involved in the flow of goods and services
from the point of initial production unit they are in the hands of the ultimate consumer.
Thus, agricultural marketing is a process by which the producer and buyer of agricultural
goods are brought together."

The marketing process establishes forward linkages for agricultural activities, that is, it
provides economic rewards for the production process. It includes not only storage and
transportation activities of the middlemen but also encompasses all activities linking the
consumer and producer. A marketing programmer plays a crucial role in the physical
distribution of any product. Therefore, each and every firm should have marketing system
for channel. The product to the market to satisfy the customers needs and wants.
Sometimes they have to face the marketing problems of capturing the market and creating
good will. "Marketing is a total system of business activities designed to plan, price,
promote and distribute want-satisfying products, services and ideas to target markets in
order to achieve organizational objectives."

A more modern definition in turn with greatly expanded productive capacity might
emphasize the adaptation of production facilities to the market. Specially, marketing might
be defined as the response of businessmen to consumers demand through adjustments in
production capabilities. Adjusting production, accounting, finance and marketing in the
light of the changing needs of consumers who are affluent enough to have varied buying
choices.

"Marketing is concerned with designing an efficient and fair system which will direct an
economy's flow of goods and services from producers to consumers and accomplish the
objective of the society."

Marketing can be defined in a simple manner as the activities done by the company to
deliver the product from the place of production to the place of production to the place of
consumption. It means that marketing is the process of the transfer of ownership of the

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product in exchange of something of value "Marketing is the business process by which
products are matched with markets and through which transfers of ownership are
affected."

Different authorities define marketing in different ways. "Marketing is the exchange

taking place between consuming groups on the one hand and supplying groups on the
other." "Marketing is the anticipation stimulation, facilitation, regulation and satisfaction
of consumer and publics demand for products services, organizations, people, place and
ideas through the exchange process." "Marketing is human activity directed at satisfying
needs and wants through exchanges process."

In light of above definitions, it can be concluded that marketing is a process of delivering

goods and services produced to satisfy the needs of producers to the consumers in an
effective way so that the objectives of the produces are fulfilled marketing thus satisfies
the objectives of the producers by making it possible to sell their products on the market in
one hand and on the other hand helps consumer to get the maximum of satisfaction by
providing goods and services for their consumption.

In the modern marketing era every marketers should understand the consumer needs.
Successful marketing understand consumers taste, quality and choice. If there is no
satisfaction of consumer that product doesn't give good result. For consumers satisfaction,
the product that is available easily and everywhere than customer attract in that product
easily.

2.1.3. Marketing Mix

Marketing mix is one of the most fundamental concepts associated with the marketing
process. It is well understood by most modern marketers and is systematically applied in
many industries especially those that deal with physical products. Yet it is easy to assume
that, because most managers have heard about it and 100 use it, there is no need to
mention it again a book on marketing.

The sad truth is that quite often the precise role and scope of the concept and its
underlying principles are not fully appreciated by those who tackle about it or use it. Many
managers as no more than a theoretical encompassed by the marketing task regard it. In

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many situation it is considered as no more than an aid to highlighting the fact that
'Marketing' is a much broader concept that just 'Selling' and 'prompting'.

A brief review of the main principles surrounding the marketing mix can help to clarify its
true role in the development a mid execution of an effective marketing effort.

"The marketing mix is the set of marketing variables which the organization blends to
achieve the marketing goal in a defined target market. the marketing mix consists of
everything the organization can do influence the demand for its product in the target
market ."

As stated earlier the marketing mix represent as assemblage of tasks and subtasks, which
ultimately will help to satisfy the customer requirements in such a way as to enable the
firm to attain its objectives in an optimum fashion. The subtle part of the concept is that
different company in the same business may option to develop different mixes. In face it is
that difference that may provide one company with a competitive advantage over its
competitors.

the concept of marketing mix essentially premises that the decision making executive must
analyze certain market forces and certain elements of marketing if the executive is
ultimately to determine a sound 'mix' of marketing elements which promises to be
effective and profitable. The 'four Ps model ' of the marketing mix has probably gained
acceptance because of its elegance rather than its validity in all situations. Regrettably,
what has been gained in simplicity has been sacrificed in universal appropriateness. It is
easy to find examples of marketing programmers, which do not outside that this model is
not of universal validity.

The theory underlying the four Ps is that if one manages to achieve the right product at the
right price with the appropriate promotion, and in the right place, the marketing
programme will be effective and successful. However, one must bear in mind that each of
the four Ps can be broken down into a number of sub-components." Marketing mix is the
settings of the firm's marketing decision variables at a particular point in time."

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Figure 1

Marketing Mix

Product Price Promotion Place

Product Variety List price Sales promotion Channels

Quality Discounts Advertising Coverage

Design Allowances Sales force Assortments

Features Payment period Public Relation Locations

Brand Name Credit terms Direct Marketing Inventory

Packaging Transport

Sizes

Services

Warranties

Returns

"Marketing mix is one of the key concepts in modern marketing. It refers the set of
variables that the business uses satisfy consumer needs." Marketing mix may be
considered as consisting of four Ps-Product, Price, Promotion and Place.

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Figure -2

Product Price

Consumer
Needs

Place Promotion
Variable of Marketing Mix

2.1.3.1 Product:

Product is one of the most important parts of the marketing mix. Without product we
cannot sell or buy the things. The product area is concerned with developing the right
product for the target market. This product may involve a physical product and / or some
combination of services. The crux of the matter in the product area is to develop
something, which will satisfy the customer's needs.

Most of the text will be concerned with will be concerned with tangible product, but the
principles in most cases also apply to services. It is important to keep this in mind, since
the service side of our economy is growing. It is also important to see the product concept
as including services, because it is too easy to become overly occupied with producing and
selling tangible products. Too many production-oriented people fall into these trap and
neglect important opportunities for satisfying needs in other ways. Automobile
manufactures and dealers.

"A product is anything that can be offered to a market to satisfy a want or need. Products
that are marketed include physical goods, services, persons, places, organizations and
ideas."

"Product mix includes decisions on product line and mix, product quality, variety, design
features, branding, packaging, labeling etc. It also includes important activities such as
product planning and development." "The product offered by an organization is what the
business (or no business) entity is all about. While we tend to think of product as objects

21 | P a g e
we can see and touch the term product may be used in referring to tangible services and
ideas as well. So product is a market's offering as perceived by the market."

A product is set of tangible and intangible attribute including packaging, colour, price,
manufactures prestige, retailer's prestige and manufactures and retailers services, which
the buyer may accept as offering want satisfaction.

2.1.3.2 Place

A product is not much good to a customer if it is not available when and where he/she
wants it. We must consider where, when and by whom the goods and services are to be
offered for sale.

Goods and services do not flow from producers to consumers automatically. They move
through channels of distribution where a great deal of marketing work is done. Channel
members may or may not handle the goods. Some may own provide return and repair
services, while also storing and transporting them. And others may be primarily concerned
with transmitting money and information. In other words, a number of things flow through
a channel, besides goods in both ways.

Place or distribution mix includes design of the distribution channels, distribution

networks, dealer, promotion and motivation systems and physical distribution of the
product. Any sequence of marketing institutions, from producer to final user or consumer,
including any number of middlemen is called a channel of distribution. Marketing
managers must work in and through such channels and so our study of place will be very
important to marketing strategy planning.

Even though marketing intermediaries are primarily a non controllable environmental

factor, a marketing executive has considerable latitude when working with them.
Management's responsibility is:

i. To select and manage the trade channels through which the products will reach
the right market a the right time and

ii. To develop a distribution system for physical handling products and then
transporting them through the appropriate channels.

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2.1.3.3. Promotion

Promotion, one of the four major variables with which the marketing managers works, is
communicating information between seller and buyer with view to changing attitudes and
behaviour. The marketing manager's job is to fell target customers that the right product is
available at the right place at the right price.

"Promotion is the ingredient used to inform and persuade the market regarding a company
motion are the major promotional activities." The major promotional methods include
personal selling involves direct face to face relationships between sellers and potential
customers. Mass selling is designed to communicate with large numbers of customers at
the same time. Advertising is the publicity. Sales promotion refers to specific activities
that complement personal and mass selling such as point of purchase displays booklets,
leaflets and direct mailings.

"Promotion is any method of informing, persuading or reminding consumers. Wholesalers,

retailers, users or final consumers about the marketing mix of product. Place and price
which has been assembled by the marketing manager."

Companies face the task of distributing the total promotion budget over the five
promotional tools advertising, Sales promotion, and public relations and publicity, sales
force and direct marketing within the same industry, companies can offer considerably in
how they allocate their promotional budget. It is possible to achieve a given sales level
with varying promotional mixes. Promotion includes all the activities the company
undertakes to communicate and promote its products to the target market.

2.1.3.4 Price

Price is also one of the major parts of the marketing mix. While the marketing manager is
developing the right product and promotion, he/she also must decide on the right price.
One that will round out his marketing mixes and makes it as attractive as possible. In
setting the price, he must consider the nature of competition in his target market as well as
existing practices on mark-up, discounts and terms of sales he also must consider legal
restrictions effecting prices.

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"Price mix includes such as analysis of competitors prices, formulation of pricing
objectives, setting the price, determining terms and conditions of sales, discounts and
commission etc. In pricing, management must determine the right base price for its
products. It must then decide on strategies concerning discounts, Freight payments and
many other price related variables."

In economic theory, we learn that price, value and utility are related concepts. Utility is the
attribute of an item that makes it capable of satisfying human wants. Value is the
quantitative measure of the worth of a product to attract other products in exchange. Price
is value expressed in terms of dollars and cents or any other monetary medium of
exchange. In Pricing we must consider more than the physical product alone. A seller
usually is pricing a combination of the physical product and several services and want-
satisfying benefits. Price is the value placed on goods and services Price is tile amount of
money and lor product that are needed to acquire some combination of another product
and its accompanying services.

"It is the variable that creates sales revenue. Consumers pay price to buy products for their
need satisfaction. It may be fixed on the basis of cost, demand or competition. It may
involve discounts, allowances, credit facilities etc. price has become the second most
important variable of marketing mix because of inflationary pressures in recent years."

2.1.4. Marketing Strategy

Marketing strategy is both unique and commonplace. That might sound like a
contradiction of term but it is not. The term "Strategy" is widely used to describe a
seemingly endless number of marketing activities. Today, everything in marketing seems
to be "Strategic". There is strategic pricing, strategic market entry, strategic advertising
and may be even strategic strategy. The glut of competition has focused more attention on
performing the traditional marketing actions strategically with an eye towards beating the
competition. In that sense, marketing strategy is commonplace. In recent years, it seems to
have been appended to nearly every marketing action.

Marketing strategy is also unique. There is not one unified definition upon which
marketers agree. Marketing strategy is a commonly used term, but no one is really sure
what it means.

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A strategic sector is one in which you can obtain a competitive advantage and exploit
strategic sectors are the key to strategy because each sector's frame of reference is
competition. The largest competitor in an industry call be unprofitable if the individual
strategic sectors are dominated by smaller competitors. Boyd and larches (1970) had
found in the history of marketing strategy that tremendous confusion over just what
strategy is. The term "Strategy" as used in marketing has been applied to at least three
types of issues, each at a different level of aggregation.

At the macro level, there are marketing strategies which focus on manipulations of the
marketing mix variables-product, price, place and promotion. According to that definition,
setting a strategy for a product consists of selecting a price for a product, designing an
advertising campaign then deciding on a plan of distribution. Finally, there are product
market entry strategies, which include strategies that look at specific marketing decisions.
Strategies that call for a firm to built market share harvest profit (and share) or defend
share from competitors.

Another widely used definition of strategy in marketing emphasizes the broader

perspective of strategy emphasizes. That definition views strategic market planning as a
four step process-

i) Defining the business

ii) Setting a mission

iii) Selecting functional plans for marketing, production and other areas and

iv) Budgeting for those plans (A bell and Hammond 1979) in that sense, marketing
strategy is more akin to corporate strategy.

Strategic marketing is a major component of the strategic planning. Its main objective is
to establish the product/market scope of a business. strategic and marketing is the method
that concern trades on the market to serve, the competition and related moves. Formally,
strategic marketing deals with the following questions-

i) Where to complete?

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 ii) How to complete?

iii) When to complete?

"Strategic marketing helps to define the market in entering and competing. That may be
the entire market. Strategic marketing provides inputs or techniques for solving customer
need. That technique may be either an introduction of a new product or existing product
with improvements similarly, strategic marketing tries to identify an appropriate time for
entering to the market defined. The appropriate time to enter the market may be the first in
the market or wait until primary demand is established".

2.1.4.1 Product Strategy

In a very narrow sense, a product is a set of tangible physical attributes assembled in an

identifiable form. Each product carries a commonly under stood descriptive name, such as
apples, steel or baseball bats. "A product is set a of tangible and intangible attributes,
including packaging, color, price, manufacture's prestige, retailers' prestige and
manufacturer's and retailer's service." "Product is anything that can be offered to a market
for attention, acquisition, use of consumption and that might satisfy a want or need.
Products include more than just tangible goods broadly defined; product includes physical
objects, service, persons, places organizations, ideas or mixes of these entities." A product
is anything that is potentially valued by a target market for the benefits of satisfaction it
provides. The General principle is that a firm must have a right product that can satisfy the
needs and wants of the consumers. But a product can not satisfy their needs and wants
over the time period, because of several reasons.

First, like living creatures a product also has a life during which a firm has reformulate or
modify or differentiate or standardize it to maintain its position in the market.

Second consumer demand goes on changing over the time period. As such, the same
consumer may demand different products over the time period.

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Finally, the requirement of all consumers is not alike, different consumers may demand
for different product attributes (Such as quality, product service, branding, good.
packaging, attractive color and design prestige, problem, solution etc.) at the same time.

Product is what marketers offer to consumers. They include goods, service, ideas and any
other things that can be exchanged by a supplier and a buyer or consumer. The term
product concept refers to the marketing strategist's selection and blending of a product's
primary characteristics and auxiliary dimensions into a basic idea or concept emphasizing
a particular set of consumer benefits.

"It clearly indicates that the product decision is not only an important decision in the
marketing but also a most challenging asks for the marketers. To succeed the competitive
markets the marketer must be able to study each and every aspects of the product
including product life cycle, new product development, product mix and product line,
product positioning branding, packaging etc."

Product strategy is the core of strategic planning for the enterprise and it plays a pivotal
role shaping marketing strategy. Management's strategic decision about the product to be
offered is among the most important of those affecting the future of company. No other
strategic decision has such widespread impact, cutting across every functional area and
affecting all level of an organization. This key strategic role should not come as a surprise
since meeting people's needs and wants with goods and services is what business is all
about. A product strategy consists of :

i. Deciding how to position a business unit's product offering (Specific

product, line or mix) to serve its target market.

ii. Setting strategic objectives for the product offering.

iii. Selecting a branding strategy.

iv. Developing and implementing a management strategy for a new and

existing products.

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2.1.4.2. Pricing Strategy:

Price is one of the four major elements that the marketing manager must consider while
preparing the marketing program. Price is regarded as a backbone on which the success of
the marketing program largely depends. No. rational product policy, no product design
and no marketing strategy can be formulated without consideration of price; no price is set
in isolation of the total strategy. Since price decisions affect not only the firm's sales and
profit but also determines its future prospects, they must be taken into account seriously.

In general, price is value or amount of money sacrificed to obtain a particular product or

service. Price may also be defined as the exchange of something of value between parties
involved in a transaction. In economic sense, price is value expressed in terms of rupees of
dollars or any other monetary medium of exchange.

Pricing in the other means the determination of proper value to a particular product or
service. In broader sense, price settings involve the determination of some object that can
be used to establish the value of the exchange to all parties involved in the transaction
determining the values to base price is a strategic decision pricing as a strategic variable in
marketing it should be based on systematic decisions to assign a value to communication
the seller's estimate worth of the offering.

Price strategy has many characteristics in common with a bomb! The consequences of
pricing decision can be explosive and far-reaching and it may be difficult to alter a
strategy once it has been implemented, particularly if the change calls for significant price
increase. Price has many possible uses as a strategic instrument in corporate and marketing
strategy.

We define a price strategy as: "Deciding how to position price within the range of feasible
prices; establishing whether price shall be used as an active or passive element in the
marketing program, setting the specific objectives to be accomplished by price; and
establishing policies and structure for guiding pricing decisions."

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2.1.4.3 Distribution Strategy

Distribution is one of the major marketing functions. With out it's effective and efficient
management the whole marketing system may be failed. So that, clever marketing
manager should have given due attention towards its better functioning. Simply speaking,
distribution is the delivery of the products to the right time, place and consumers. It is not
a single element, but it is a mixed of various to consolidate functions. Such as channel of
distribution, transportation, warehousing and inventory control etc.

Most products work with marketing intermediaries to bring their product to market, they
try to forget a distribution channel. A producer should decide how many middlemen he
should seek at each level of distribution. He will determine the numbers of retailers,
wholesalers, agents and so on.

"Distribution may be defined as an operation or a series of operation which physically

bring the goods manufactured or produced by any particular manufactures in to the hands
of the final consumer or users". Distribution channels are the major factors in the effective
development of the market share, internationally to maintain quality and ensure services;
direct distribution is also under taken by many manufacturers. Also, the use of multiple
channels will expand and include Tele-marketing, direct response marketing, mail-order
and computer assisted buying.

Distribution is concerned with activities involved in transferring goods from producer to

final buyers and users. It includes not only physical activities, such as transporting and
storing goods, but also the legal promotional and financial activities performed in the
course of transferring ownership. Since a succession of enterprises is generally involved in
the distribution process leading to the final sale to the consumer or user to understand
distribution one must analyze both the different kinds of marketing institutions and the
marketing channels in which they operate.

The means of distribution have a very significant effect upon the prices of goods and a
single means is not enough due to the geographical diversity. Where there is single system
this has led to the rise in the price of commodities on the one hand and the non availability
of them in time, on the other hand. These problems have pointed to the necessity of a new

29 | P a g e
management in the means of distribution which specially considers the factors like the
nature of the commodity, the behaviour of the customers, effectiveness of time, education
and social values.

Distribution Channels

The distribution channel moves goods from producers to consumers. It's overcome time,
place and possession gaps that separates goods and services from those who would use
them. The different distribution channels are useful for receiving information, finding and
communicating with perspective buyers, attempting to agree on price and the other terms
that the transfer of ownership possession can happen.

A channel of distribution is an organized network of agencies and institutions which in

combination perform all the activities required to link producers with users and users with
producers to accomplish the marketing task.

These intermediaries or channel of distribution tend to be used for several reasons:

i. The number of sellers and buyers and the distance of product movement are
relatively large.
ii. The frequency of purchase is high.
iii. The lot sizes needed by end users are small
iv. Markets are decentralized.
There are three levels of marketing channels.

i. Direct channel
ii. Indirect channel
iii. Mixed channel.

Under direct channel, producer himself distributes goods and services to the end users. No
intermediaries are used in this case. Under indirect channel, several intermediaries such as
whole sealers, retailers, dealers, agents etc are used to supply goods and services from
production point to the consumption point. Under mixed channel, producer uses both
direct as well as indirect channels at the same time for the purpose.

Physical Distribution

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Physical distribution is concerned to the management of physical flow of goods from the
points of suppliers to the points of purchasers. "Physical distribution is concerned with the
actual movement and storage of products after their production and before their
consumption." "Physical distribution involves the physical flow of products. Physical
distribution would involve.

i) The movement of finished goods from the production line to the final
customer and

ii) The flow of raw materials from their source of supply to the production
line."

The main objective of physical distribution is getting the right product safely to the right
places at the right time at the least possible cost. More specifically, the objectives of
physical distribution are:

i. To prove customer service.

ii. To distribute goods more safely.

iii. To minimize the total cost.

iv. To supply goods to the right target market function of physical distribution.

A physical distribution system consists of a sell of interrelated functions with specific

boundaries. The inter-related functions include the following element.

i) Transportation

ii) Warehousing

iii) Inventory management and control

iv) Order processing

v) Material Handling

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2.1.4.4 Promotional Strategy

Promotional strategy is also one of the most important marketing strategies. There is
various type of promotion. These include advertising, personal selling, sales promotion
various miscellaneous efforts. When management has a message to pass to target
consumer's promotion is the proper vehicle.

A company needs to make marketing decisions only in the areas of segmentation, product
offering, pricing and distribution but also in the area of promotion. Promotion is "any
marketing effort whose function is to inform or persuade actual or potential consumers
about the merits of a (given) product or service for the purpose of inducing a consumer
either to continue or to start purchasing the firm's product or service at some (given)
price."

Promotion is persuasive communication. It is a highly visible element in the marketing

mix. It tells the target customers about product, price and place. It is also known as
marketing communications. Promotion is applied communication used by marketers to
exchange persuasive messages and information between buyers and sellers.

"Promotion represents the various communications to inform and persuade people that a
firm directs towards its market targets, channel organizations and the public at large.
These communications consists of advertising, personal selling, sales promotion and
publicity activities. Personal selling, sales promotion and publicity activities. Increasing,
marketing management is finding it profitable to combine advertising, personal selling,
packaging, point of purchase, direct mail, product sampling, publicity and public relation
decisions into an integrated promotion strategy for communicating with buyers and other
involved in marketing purchasing decision. Since each type of promotion has certain
strengths and short comings, the strategy adopted should capitalize upon the advantages of
component in shaping a cost effective communications mix.

There are various promotion methods.

 Advertising
 Personal Selling
 Sales Promotion

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  Publicity
 Public Relations
2.1.5 Marketing System

A system is set of units with relationships among them. Marketing is a total system of
business activities designed to plan, price, promote and distribute want satisfying product
to target market to achieve organizational objectives.

The concept of marketing system is given by the system approach to marketing based
upon the work of Ludwig van Bertalanffy. "Marketing is a total system of business
activities designed to plan, price, promote and distribute want-satisfying products to target
market to achieve organizational objectives"

The term "marketing system" consists of two separate words "Marketing" and "system".
Marketing is a human activity directed at satisfying needs and wants through exchange
processes. On the other, the term "system" means regularly interacting group of activities
forming a unified whole. In other words, system means systematic or regular flow of any
thing directed at fulfilling basic goals.

Marketing system deals with the smooth functioning of the marketing activities for the
fulfillment of the consumer needs and wants. If a marketer fails to do so, then one must
know that there is something wrong with the marketing organization. And, in this situation
no marketer can work successfully. So, the marketing manager must be able to analyze the
marketing system in a systematic manner.

2.1.6 Marketing Environment

The Marketing environment consists of external forces that directly or indirectly influence
an organization's acquisition of inputs and generation of outputs. Examples of inputs
include skilled personnel, financial resources, raw materials and information. The output
should be information, packages, goods, services or ideas. Environment is outside
organization but potentially relevant to the firm's market and marketing activities. It
consists of the factors that affect the firm's ability to develop and maintain both the
successful transactions and the relationship with its target customers. The marketing
environment as consisting of six categories of forces: political, legal, regulatory, societal,
economic & competitive and technological.

33 | P a g e
"The company's decision is directly affected by the marketing mix and the marketing mix
and the marketing mix decision is affected by the marketing environment. Therefore,
while deciding marketing mix, a comprehensive study and analysis on marketing
environment must be made to make the decision more effective and suitable marketing
environment includes forces such as, economic, socio-cultural, demographic, competitive,
technological, political & legal natural etc."

In this sense marketing environment lays upon limits or constraints on the firms
marketing activities, such as marketing information system, marketing planning system,
implementation system, control system, production activities, pricing, promotion, placing
etc. The effect of marketing environment can not be measured in term of expectations,
assumptions and predictions but in terms of goal achievements. That's why; investing a
huge amount of time, money, energy etc has become a new life style of almost marketing
enterprises.

Figure-3

Economic Socio-Cultural
Environment Environment

Product

Competitive Demographic
Environment Environment
Place Price

Promotion
Marketing
LegalEnvironment Technological

34 | PEnvironment
age Environment
The importance of marketing environment to the management has been increasing these
days than even before, because there are several opportunities and threats or challenges
within the marketing environment, which should be forecasted and rightly analyzed by the
marketing manager to enjoy the opportunities. A successful marketer is one who can
appropriately analyze these forces. A successful marketer can acquire several
opportunities through these forces amid successfully run his business. The key to
marketing success lies more now than ever, on knowing: what a firm is; what it is in the
competitive environment; and who its competitors are.

2.1.7. Role of Marketing in Industrialization

Industrialization is the impetus of overall development of country. Today, industrialization

is considered as synonymous to development. The countries, which are industrialized are
developed too and vice-versa. Many countries which we say the most developed countries
like UK, USA, Japan, China etc. have been fully industrialized and the countries which are
under developed or developing are also stepping gradually a head toward that direction.
All Nepal, a developing country too is not exception to this phenomenon of the world.

Marketing plays a very significant role in accelerating the pace of industrialization, which
in turn, aims at making the economy developed and strong. In this connection, it is
significant to note that marketing is the most important multiplier of economic
development. The development of marketing makes possible economic integration and the
fullest utilization of assets and productive capacity an economy already possesses. It
mobilizes latent economic energy and finally contributes to the greatest needs: that for the
rapid development of entrepreneurs and in manages.

Marketing plays important role in the process of industrialization. The proceeds of

industrial activity are passed on to the society through the process of marketing. Hence,
the success or failure of business largely hinges upon the art and science of marketing,
which is composed of explorative knowledge, act, and talent of veteran practitioners. In
the global market, The multinational companies like-Sony, Hitachi, Toshiba, Philips,
Proctor & Gamble, Johnson & Nichol son and many others have been permeating
throughout the world with the help of modern marketing practices and methods. So are the
tata, The Birla, The Ambani, The Bajaj India, and STC, Thai food (RARA Noodles),
Bottlers Nepal and Panchakanya Iron in Nepal. Marketing in this sense has made the

35 | P a g e
producers as well as the customers more conscious toward comparative service, values,
safety, satisfaction and convenience.

2.1.8. Introduction of Advertising

Advertising is directly toward a group of people who are also called prospects to influence
in the buying decision. This view may be clear by the view of Kenneth A. Longman. He
has said, "When a persuasive communication is directed toward large group of individuals
it is called advertising.

Advertising media is the vehicle through which advertiser's message goes to target
audiences. It is the vita connection between the company that manufacturer's product and
the consumers who buy it. Advertising media is a type of communication. Producers want
to given a lot of information about his products but he can not to do so by personal efforts,
by personal contract or by mail. The advertising media is the career of the advertising
message.

"Advertising consists of all the activities involved in presenting to a group a non-personal

or oral, visual openly sponsored message regarding a product, service or idea."

Figure 4

1) Print Advertising Media: 3. Direct Advertising Media:

 Newspapers  Envelop Enclosures
 Magazines  Catalogue & Booklets
 Other  Sales letters
 Gift novelties
2) Electronic Advertising Media 4) Computer Advertising
 Radio  Internet
 Television  E-mail
 Video  Fax
 Cinema
 Electric Signs
 Sky Writing

Medium of Advertising Media

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The medium or communication channels can be impersonal or interpersonal. Mass media
consists newspapers, magazines, billboards, radio, television, internet and interpersonal
media is a internal formal conversation between a sales persons and customers.

2.1.9. Introduction of Promotional Activities

According to the E.J. Mc. Corthy promotion is any method of informing, persuading or
reminding consumers; wholesalers, retailers, users or final consumers about the marketing
mix of product, place and price which has been assembled by the marketing manager.

Promotion is related to communication. Most of the companies use the various types of
promotional activities-marketing materials, promotional materials, information about the
company and product and every kind of information is provided to the customers from
various types of promotional tools. The major promotional tools is advertising, personal
selling, sales promotion, publicity and public relations.

Advertising

Advertising can be described as any paid form of non-personal communication by a

sponsor. According to the national associations of marketions Teacher of America-
Advertising is any paid form of non personal presentation of goods, services or ideas to a
group, such presentation being openly sponsored by the advertiser. "Advertising includes
any persuasive message carried by a mass medium and paid for by a sponsor who sings
the message"

Personal Selling

Personal selling is an oral presentation in a conversation with one or more prospective

customers for the purpose of marking sales. Personal selling can be a very intense means
of promotion. personal selling consists of person-to person communication between sales
person and their prospects. Unlike advertising, it involves personal interaction between the
source and the destination. "Personal selling is the personal communication of information
to persuade a prospective customer to buy a good, Service or idea."

Sales Promotion

According to American marketing Association-Sales promotion refers to those marketing

activities, other than personal selling, advertising and publicity that stimulate consumer

37 | P a g e
purchasing and dealer effectiveness, such as displays, show and expositions,
demonstration and various non-recurrent selling efforts not in the ordinary routine. Sales
promotion activities are impersonal and usually nonrecurring and are directed to ultimate
consumers, industrial consumers and personal selling efforts. Examples of sales promotion
are free product samples, trading stamps, store displays, premiums, coupons and trade
shows.

Publicity

Publicity is a means of promoting to the mass market. Publicity is similar to advertising,

except that it is free, is found in the editorial portion of news media and pertains to news
media and pertains to newsworthy events. "Publicity is any promotional communication
about an organization or its products that is presented by the media, but it is not paid for
by the organization."

The most common type of publicity are news releases or press conference, annual
function, exhibition, photographs and features stories.

Public Relations

Marketers engage in public relations in order to develop a favorable image of their

organizations and products in the eyes of the public, they direct this activity to parties
other than target consumers. These 'others' include the public at large labour union, the
press and environmentalist groups. Public relations activities include sponsoring floats in
parades, lobbying and using promotion messages to persuade members of the public to
take a desired position.

It is the variable that communicates to the consumer about other variable of marketing mix
for their need satisfaction. It consists of advertising. Publicity, personal selling, sales
promotion and public relations.

2.1.10 Marketing Channels

According to stanton and futrell- A marketing channel or channel of distribution is a

group of interrelated intermediaries who direct products from producers to consumers or
industrial users.

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Most producers do not sell their product directly to the final consumers. That is why, they
use variety of intermediaries. Channels are the medium for taking the goods and services
to ultimate buyer. These organizations and agencies are grouped together in various
combinations linking particular producing units through the channel of distribution.

Figure 5

MANUFACTURERS

WHOLESALERS

WHOLESALERS AGENTS

RETAILERS RETAILERS RETAILERS

CONSUMERS
Distribution Channel for Consumer Goods

For the consumer goods, marketing channels are divided into following parts.

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i) Zero level channel

In this level, the producers or manufacturers sell their product to final consumers directly.
This is one of the very simple and short medium to distribute and sell the product. This
can be seen in following figures.

Manufacturers

Consumers
ii) One level Channel

In this channel, manufacturers sell their product to retailers at first. Then, retailers sell
these products to final consumers. It can be seen in following figures.

Manufacturers

Retailers

iii) Two-level Channel Consumers

At this channel, manufacturers use two levels of intermediaries. Wholesales and retailers,
by the help of them manufacturers sell the product to the final consumer manufacturers,
retailers purchase this product from wholesalers, and retailers sell it to final consumers. It
can be seen in following figures.

Manufacturers

Wholesalers

Retailers

Consumers

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iv) Three-Level-Channel

This is the largest medium to distribute and sell the consumer goods. At this channel,
manufacturers uses the three type of intermediaries wholesalers, agent and retailers. It can
be seen in following figures.

Manufacturers

Wholesalers

Agents

Retailers

Consumers
2.2 Review of Previous Studies in Nepal
2.2.1. Pathak, Krishna Prasad, "Coffee Marketing system in Nepal"

The study was undertaken in 1998 with the following objectives.

i) To analyze the present phenomena, problems for the farmers engaged in coffee
farming.

ii) To assess the existing coffee marketing system.

iii) To analyze the challenges, problems and profitability of farming processing

and marketing of confessional standards.

iv) To recommend measures for improvement.

From this study the following conclusions have been deduced. Nepalese farmers are
motivated to plant coffee for better yields and they need technical support and training for
professionals farming skills. There is no support to farmers. Input, supply and sales
security were very weak. Recently emerging community activities show better symptoms
in this respect. Pricing to support farmers was effective due to increased competition.
Market promotion is weak and packing is the first place to start place to start promotional
campaign. New push sales is the only measure and no promotions are done. Distribution

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system components are assembly transportation, processing and order processing.
Through Nepalese domestic production covers only 22.9 percent of domestic market,
Nepalese coffee is worth exporting and Nepalese consumers prefer instant coffee mainly
imported from India. It shows that Nepal can develop coffee, as an important cash crop to
generate exports, which should help in economic growth, employment generation and
mitigating the ever-increasing unavoidable balance of trade, for this professional and
institutional approach, is warranted for.

The study has recommended that select better seeds appropriate for Nepalese landscape
and climate should be conducted. Interest rate 17% is not appropriate for farming and is
very high. Enterprising farmers should be trained so as to make them the bridge between
the ordinary farmers and technical experts. Wet pulping should be introduced and farmers
should be facilitated to pulp, hull and grade the beans and green beans should be
introduced in trade. There should be improved in packing of roasted coffee.
Demonstration farms should be developed as the catalysts to incorporate rural people in
modern business ethics professionalism should be encouraged in coffee marketing.

2.2.2 Thapaliya, Anup Kumar, "A study in Market situation of Instant Noodle Yum
Yum in Kathmandu"

A case study mainly focused in market situation of Yum Yum in Market having following
main objectives-

i) To test the market of "Yum Yum" in Kathmandu.

ii) To obtain and analyze the information on the sales of different kinds of instant noodles
in Kathmandu.

iii) To obtain the consumers opinion on price, quality and test of different brands.

iv) To compare the position of "Yum Yum" instant noodles with other brands.

v) To assess the average percentage of consumer's loyalty over several brands.

vi) To compare the price, quality & taste of "Yum Yum" with other brands.

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vii) To suggest the company of "Yum Yum" for overall marketing activities for better
distribution.

viii) To assess the status, usage pattern, attitude and Image of Yum Yum.

On the basis of field survey and subsequent analysis, the study has found followings. All
wholesalers are under the distributorship of Chitwan supplier, the single, distributor to of
Yum Yum in Kathmandu. Wholesalers prefer the brands of noodles on the basis of sales
volume. On the basis of sales volume Wai-Wai stands at the top and Yum Yum stand in
second. Few wholesalers have expressed the view that some retailers complain over the
price of Rara, Wai-Wai, hits and on the taste of Yum Yum. After introduction of Yum
Yum in the market, 90% of wholesalers expressed that it is satisfactory and rest of the
wholesalers expressed that the quality is not satisfactory regarding the distribution of
different brands by their quality. Wai Wai is the best quality noodle and Yum Yum was
second position. Out of 100 percent 65 percent use noodles as Tiffin and rest 35 percent
respondents use it as both Tiffin and dinner.

This study concluded that the use of instant noodles has become a general consumption
Phenomenon in Kathmandu. There are various brands of instant noodles available in the
market and market noodles has turned to be competitive in recent years. The company
does not have effective & reliable channel to collect information from wholesalers,
distributors & consumers.

The study has recommended that an improvement in the test and quality and fixing
reasonable price can be helpful measure to increase the incentive to the wholesalers/
distributors so as to motivate & encourage them to focus their transactions on Yum Yum.
The company should diversity its market by penetrating into potential rural areas. It should
establish efficient distribution networks and provide reasonable amount of commission at
each level.

2.2.3. Lmichhane, Hari "Marketing of Cold drinks in Kathmandu"

The study was focused with following main objectives-

i) To examine the potential consumers in purchasing cold drinks.

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 ii) To identify the purchases behaviour of consumers who purchase cold drinks.

iii) To estimate demand of cold drinks in Kathmandu.

iv) To identify the best choice of consumers on cold drinks on the basis of
selecting brands advertising, habitual testing, asking questions & personal
inspection.

v) To find the relationship between the brand preference and advertising

vi) To find out the popular media of advertising for the cold drinks, which can
easily attract the potential consumers on each company, branded cold drink.

vii) To estimate sales of cold drinks in Kathmandu.

The study has concluded that advertising is considered as the primary source of
information. The advertisement of coke, Coke and other branded cold drinks are found in
Kathmandu. Coca-Cola brand is more popular than other brand. Consumer gives more
preference to the brand but less preference to quality and test. Television is the mostly
favorite media for advertisement. The major reasons of brand switching are the taste of the
product.

The study has recommended that advertising should be more believable and effective, So
manufacturers are suggested to advertise their product through television and other media.
Most of consumers are found brand loyal. If they don't get the desired brand they use the
alternative brand. So the marketers are suggested to give proper attention on their
distribution system. It is suggested that the manufacturers of cold drink should try to fulfill
consumer's demand on cold drinks of their choice.

2.2.4. Bhatta, Shree Chandra. "Sales Promotion and its effect on sales: A case study
of Beer Market of Nepal.

A case study of Beer Market of Nepal with the objectives of analyzing the sales promotion
and its effect on sales is the main focus of the study. Though the concept of sales
promotion is relatively new in Nepal, there are lots of things to be researched and find out
on the practice of sales promotion. The study had the following objectives.

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 i) To find out whether sales promotion does impact on sales of beer.

ii) To find out what mode of sales promotion is more acceptable by the Nepalese
consumers.

iii) To find out what mode is more wisely use by the manufacturers as a sales
promotion tools.

vi) To evaluate effectiveness of sales promotion activities in the sales of beer in Nepal.

v) To find out which media is suitable to advertise about the sales promotion.

vi) To predict the sales of coming year if every factors would be the same.

On the basis of analysis of the consumers view point and sales data separately. The
following findings are drawn. The people with high income group highly educated and
from business people tend to drink beers more. The people drink beer at restaurants for
relaxation rather than other cause. The people prefer san Miguel brand than other beers. In
the case of sales promotion the cash prizes out of all the tools insist people. In advertising,
electronic media is very popular among the people. It the expenses on sales promotion
among the people. If the expenses on sales promotion increase the sales increase in high
speed. From the regression it is clearly seen that if the expenses on the sales promotion
increases the sales of the product will be increases. It is concluded that sales promotion
works as a starter to the beer drinkers. Most people who are not so educated, are no loyal
to wards any particular brand. Due to this the sales promotions easily quench the attention
of those beer drinkers and as a result the sales of the beer will increase.

The people who drink beers accept electronic media. So far sales promotion purpose, the
electronic media is very suitable. The sales promotion is very powerful tools which can
easily boots the sales. The study has recommended that low income group as well as low
education group should be launched the beer. In advertising, the electronic media is very
popular. So, the heavy media coverage should be acquired. People like cash prizes, so
company should cut down the prize like motorcycles, fridge, T.V etc. Findings proved
that the sales promotion have positive impacts on the sales of the beers. but the companies
launched the sales promotion programmes for only 3 months. It is strongly advised that

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sales promotion programmes should be launched at least for six months. At last, sales
promotion is very important if the use would be in a proper way.

Chapter-3

Research Methodology

Research is the systematic and scientific effort in order to identify the truth. It is a fact-
finding action. Thus research is searching and answers to questions. It is a systematic and
organized effort to investigate a specific problem that needs a solutions.

Methodology is the set of research method used to collect information, analyze and
interpreted the data and test the hypothesis. Therefore, methodology can be designed as a
systematic procedure of solving the problem. It may be understood as a science of
studying how research is done scientifically.

The objective of this study is to examine the marketing of 'Coke' is Kathmandu. In this
study, the necessary relevant data have been collected from the sample consumers and
retailers. To achieve the objective, the study follows a research methodology, which has

46 | P a g e
been described as the research design, population and sample, nature and sources of data,
data collection procedures and data processing and analysis.

3.1 Research Design

Research design is layout of a research. It is always purposeful scheme of action proposed
to be carried out in a sequence during the process of research, focusing on the
management problem to be tackled.

Research design is scheme for doing research work. It is the plan, structure and strategy of
investigation conceived so as to obtain answer to research questions and to control
variance.

Basically, the research design has two purposes. The first purpose is to answer the
research questions or test the research hypothesis. The second purpose of a research design
is to control variance. Several typologies have been suggested for classifying a wide
variety of research designs used in social science. McGrath suggested five models of
different types of research designs; controlled experiment, study, survey, investigation and
action research. Selltiz and others suggest three broad categories of research design,
formative or exploratory studies, descriptive studies and studies testing causal hypothesis.
Boyd, West and Starch suggest two broad categories of research design; exploratory
research and descriptive research design. In this study research design are to be categories
according to Boyd, West and Stach.

There are mainly two types of research design exploratory and descriptive. Exploratory
design is essential for formulating hypothesis. It is done to investigate possible cause and
effect relationships by exposing one or more control group to one or more treatment
conditions and comparing the results to one or more control groups but not receiving the
treatment. Descriptive research design is a type of fact-finding research. It is conducted
under respondent's options.

The descriptive research designs will be followed in the study. Such design provides a
description of a specific situation in such a ways as to help the researcher identify cause
effect relationship.

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This study is based on the survey research design. A limited scale survey has been
conducted among the consumers and retailers of Coke in Kathmandu. The questionnaires
have been administered in order to generate data and other information relating to the
research questions adopted for this study.

3.2 Population and Sample

As the total population of 'Coke' users presently available is hard to find in number, the
study take the population as the total consumers of Coke drink in Kathmandu
municipality. The study has included 50 consumers and 50 retailers of 'Coke' drink based
in Kathmandu. Sampling is the practice of selecting group of consumers considered to
represent the entire population because it is neither feasible nor practical for research to
contact to all the members of a population. Though, the sample size is very small in
comparison to the total population, sufficient efforts have been made to make the sample
representative by including consumers from the different professions, age group
educational background and sex.

3.3 Nature and Sources of Data

Data are mainly two types, one is Primary data and another is Secondary data. Primary
data are the first hand data, generated by original research to solve the specific and current
research questions. The major advantage of primary data is that the information is specific,
relevant and up-to-date. There are two principal method of collecting primary data:
Observation and Questionnaire

Secondary data are information that are already collected for other purposes and is readily
available. The advantage of this type is its availability and lower cost than primary data.

For this study, both primary and secondary data and information are used. But research is
mainly based on primary data or original data collected directly through the questionnaires
and oral conversation from the concerned and consumers .The questionnaires were
distributed to the consumers and retailers of Kathmandu collecting necessary information.

3.4 Data Collection Procedure

The data have been collected through a self-administered questionnaire survey at
respondent's place at mutually convenient time. The questionnaire distributed through

48 | P a g e
personal contact in which the respondents were requested to fill up the questionnaires. The
respondents were supported by oral explanation at the point where they got confused or
unable to understand content of the questionnaires. The researcher personally visited to
take interview of the retailers and consumers. Consumers were chosen from different
socio-economic background for interview. Sample of the questionnaires is given in
Appendix A & B.

3.5 Data processing and analysis

The raw data collected through the questionnaire have been manually processed and
presented in the form of table. Once the data are arranged sequentially, simple statistical
tools were used for analysis. The processed data have also been presented Graph, Bar-
diagram and Pie-chart. All the questionnaires were distributed and collected by the
researcher himself. So, there was no delay in collection of the questionnaires distributed to
the consumers. Every questionnaire was thoroughly checked after the collection.

49 | P a g e
 Chapter- 3

Data Presentation and Analysis

Since this chapter is analytical and interpretative by nature, it consists of various activities
that the researcher has undertaken. The data and information collected from the consumers
and retailers have been presented, analyzed and interpreted in this chapter for attaining the
stated objectives of the study. The data were presented in suitable table with appropriate
headings to provide clear picture of what was intended to show. While preparing these
tables, it was processed to the best to remove complexities. In course of analysis, both the
mathematical and statistical tools, which were previously explained in the third chapter,
were used. This chapter first presents the consumer level survey and then after the retailers
level survey.

4.1 Consumer's Survey

This chapter particularly consists of the analysis and interpretation of the following.

 Consumer's profile.
 Most preferred time for taking Coke drink.
 Suitable place for having Coke drink.
 Reason for having Coke drink.
 Size of Coke drink most preferred.
 Factors that influence to have Coke drink.
 The most effective advertising media.
 Frequency of purchase of Coke drink.
 Participation in the process of Coke drink.
 Reason for changing Brand.

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4.1.1 Consumer's Profile
Table No. 4.1.1.1

Users of Coke drink-Age wise

Age No. of Respondent Percentage

10-20 9 18%
20-30 22 44%
30-40 14 28%
Above-40 5 10%
Total 50 100%

22
25

20
14
15
9
5
10

0
10-20 20-30 30-40 Above-40

Source:- Field Survey 2015

As shown in table no 4.1.1.1 among the sample selected for the study, 18 percent of
consumer of Coke drink lies in the 10-20 age groups, 44 percent lie in the 20-30 age
group, 28 percent lie in the 30-40 age group and 10 percent lie the above 40 age groups.
From this table it can be inferred that users of Coke drink can be found across the different
age group.

Table No 4.1.1.2

Users of Coke drink-Gender wise

Gender No. of Respondent Percentage

Male 24 48%
Female 26 52%

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Total 50 100%

Index

48%
52% Male
Female

Source- Field Survey 2015

The above table 4.2 shows that among the total respondents, 48 percent male consumers
like to consume Coke drink and 52 percent female consumers are consume this product.

Table No. 4.1.1.3

Users of Coke drink-Education Wise

Education No. of Respondent Percentage

Under SLC 15 30%
SLC/Int. 9 18%
Graduate 16 32%
Above Graduate 10 20%
Total 50 100%

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 20% Index
30%

Under SLC
SLC/Int.
Graduate
Above Graduate
32%
18%

Source- Field Survey 2015

Table no 4.1.1.3 presents the education profile of the respondents. Out of the 50
respondents surveyed, 30 percent are under SLC, 18 percent are SLC and intermediate, 32
percent are graduate and 20 percent are above graduate. From this explanation, it is clear
that according to the respondents, graduate level respondents are most preferred to drink
Coke.

Table No. 4.1.1.4

Users of Coke drink-Occupation wise

Occupation No. of Respondent Percentage

Students 20 40%
Job holders 16 32%
Businessmen 9 18%
Others 5 10%
Total 50 100%

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 20
20 16

15

9
10
5

0
Students Job holders Businessmen Others

Source-Field Survey 2015

As shown in table no. 4.1.1.4, according to the occupation background, 40 percent are
students, 32 percent Job holders, 18 percent business men and 10 percent from other
occupations are consumed Coke drink.

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4.1.2 Most Preferred time for taking Coke drink
Table No.4.1.2

Time No. of Respondent Percentage

Before Lunch 8 16%
Lunch 5 10%
Snacks 35 70%
Dinner 2 4%
Total 50 100%

4%
16%

Index
10%
Before Lunch
Lunch
Snacks
Dinner
70%

Source- Field Survey 2015

From the above table no. 4.1.2., it proves that the most preferred time for taking Coke is
snacks time. Among the 50 respondents survey in Kathmandu, 70 percent of the
respondents are found to take Coke in Snacks time, 16 percent of the respondents take
before lunch, 10 percent take at lunch and 4 percent respondents take Coke at dinner time.

4.1.3 Suitable Place for having Coke drink

Table no 4.1.3

Time No. of Respondent Percentage

Home 8 16%
Restaurant 20 40%

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Picnic 15 30%
Festivals 5 10%
Others 2 4%
Total 50 100%

20
20
18 15
16
14
12
10 8

8 5
6
4 2

2
0
Home Restaurant Picnic Festivals Others

Source- Field Survey 2015

As shown in table no. 4.1.3, the most suitable place for having Coke drink is restaurant. 40
percent of the respondents is found to consume Coke at restaurant. While 30 percent of the
respondents consume Coke in Picnic, 16 percent of the respondents consume Coke in their
own house, 10 percent of the respondents consume Coke in festivals and only 4 percent
respondents consume in other places.

4.1.4 Reason for having Coke Drink

Table No. 4.1.4

Opinion No. of Respondent Percentage

Taste 8 16%
For Delight 5 10%
Quality 10 20%
Quenching the thirst 25 50%
Others 2 4%
Total 50 100%

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 25
25

20

15
10
10 8
5

5 2

0
Taste For Delight Quality Quenching Others
the thirst

Source- Field Survey 2015

As shown in table no. 4.1.4, 50 percent of respondents opine that he best reason for having
Coke drink is quenching the thirst. While 20 percent of respondents are found to consume
Coke for quality, 16 percent of respondent for the taste, 10 percent of respondents for
delight and 4 percent respondents concludes for other interests and hobby.

4.1.5 Size of Coke drinks most Preferred

Table No 4.1.5

Size No. of Respondent Percentage

200 ml 4 8%
250 ml 36 72%
500 ml 2 4%
1 lit. 3 6%
1.5 lit. 5 10%
Total 50 100%

As shown in table no. 4.1.5, the most preferred size is 250 ml., 72 percent of consumers
preferred for this size, 10 percent of consumers followed by 1.5 lit bottle, 8 percent of
consumers preferred 200 ml bottle size, 6 percent of consumer like 1 lit while 4 percent of
consumer like 500 ml size the least preferred size.

4.1.6 Factors that influence to have Coke drink

Table No 4.1.6

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Option/Rank I II III IV V Total
Quality 25 15 5 3 2 50
Price 10 15 15 5 5 50
Taste 20 15 5 5 5 50
Advertisement 7 10 15 13 5 50
Others 5 10 15 10 10 50
Total 50 100%

Source- Field Survey 2015

In table no. 4.1.6 different factors influencing consumption of Coke drink have been
ranked according to consumer's choice. Consumers have ranked the quality of the Coke
drink as the most important factor (25 first rank and 15 second rank), followed by taste (20
first rank and 15 second rank). The price is in the third position with 10 first ranking and
15 second ranking. Similarly, advertisement is in the fourth position and others are in the
fifth position.

This indicates that consumers give higher preference to the quality and taste in the choice
of Coke, moderate level preference to price and advertisement and lower preference to the
other factors.

4.1.7 The most effective advertising media

Table No 4.1.7

Media No. of Respondents Percentage

T.V. 30 60%
Radio 10 20%
Magazine 5 10%
Hoarding Board 3 6%
Others 2 4%
Total 50 100%

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 4%
6%
Index
10%

T.V.
Radio
Magazine
Hoarding Board
20% 60%
Others

Source- Field Survey 2015

Consumer's perception of the most effective media is presented in table 4.1.7. The table
indicates that consumers feel that the T.V. is the most effective media (60 percent),
followed by Radio (20 percent), Magazines (10 percent), Hoarding Board (6 percent) and
others (4 percent). The survey shows that even though the exposure of Coke drink
advertisements through radio is found to be low, Yet consumers feel that it is an effective
medium for advertisement of Coke after the T.V.

4.1.8 Frequency of Purchase of Coke drink.

Table No. 4.1.8

Options No. of Respondents Percentage

Once a day 15 30%
Twice a day 5 10%
Once a week 10 20%
Twice a week 7 14%
Others 13 26%
Total 50 100%

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 16 15
14 13
12
10
10
8 7
6 5
4
2
0
Once a Twice a Once a Twice a Others
day day week week

Source- Field Survey 2015

The above table shows that the frequency of having Coke of the consumers. According to
this table, 30 percent of consumers are found to have Coke once a day, 10 percent of
consumers have twice a day, 20 percent of consumers have Coke once a week, 14 percent
of consumers have Coke twice a week and 26 percent of consumers have Coke whenever
they like to have. From above explanation, it is clear that most of consumers consume
Coke once a day.

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4.1.9 Participation in the process of Coke drink

Table No. 4.1.9

Options No. of Respondents Percentage

My self 29 58%
Family member 11 22%
Friends 8 16%
Others 2 4%
Total 50 100%

29
30
25
20
11
15
8
10
2
5
0
My self Family member Friends Others

Source- Field Survey 2015

Table no 4.1.9 shows that out of total consumers, 58 percent of consumers purchase for
Coke drink themselves, 22 percent of consumers purchase through their family members,
16 percent of consumers purchase through their friends and 4 percent of consumers
purchase this drink though other people.

From the above analysis, we can say that most of the consumers purchase Coke drink for
themselves.

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4.1.10 Reasons for Changing Brand

Table No 4.1.10

Reason No. of Respondents Percentage

Not Available 20 40%
Because of Expensive 12 24%
Giving more scheme by competitors 5 10%
To find New taste 10 20%
Because of Advertising 3 6%
Total 50 100%

Index
20
20 Not Available

15 Because of Expensive
12
10 Giving more scheme by
10 competitors
To find New taste
5
5 3 Because of Advertising

Source- Field Survey 2015

As presented in table 4.1.10, consumers are found often trying other brands as 20 percent
respondents change their brand to find new taste. While 40 percent respondents change
their brand when they are most preferred brand is not available. Another 24 percent of
respondent change their brand because of price factor, 10 percent of respondents change
their brand when competing brand provides different sales schemes and only 6 percent of
respondents are found to change their brand due to advertisement. Thus, it includes that a
large number of respondents change their brand to find the new taste.

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4.2 Retailers Survey
This chapter particularly consists of the analysis and interpretation of the following-

 Year in Business
 Retail Sales of Coke in Per day
 Size of bottles sold most
 Type of Packaging preferred for selling
 Satisfaction from the distribution
 Reason for preference to sell the brand
 Influence of advertising on sales
 Factors for Increase in sales of Coke
 Sales promotion schemes to induce sales.

4.2.1 Year in Business

Table No-4.2.1

Reason No. of Respondents Percentage

0-5 30 60%
5-10 14 28%
10-15 5 10%
15 Above 1 2%
Total 50 100%

As shown in table no 4.2.1, among the 50 retailers surveyed 60 percent of retailers have
been running their business for last five years. 28percent of retailers for the last 5 to 10
years, 10 percent of retailers for the last 10 to 15 years and 2 percent of the retailers have
been running their business for the last 15 years.

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4.2.2 Retail Sales of Coke in per day

Table No-4.2.2

Crates No. of Respondents Percentage

½ Crates 8 16%
1 Crates 10 20%
2 Crates 22 44%
3 Crates 6 12%
Others 4 8%
Total 50 100%

8% Index
16%
12%
½ Crates
1 Crates
20%
2 Crates
3 Crates
Others
44%

Source- Field Survey 2015

Table no 4.2.2 shows that out of 50 retailers 44 percent sells 2 crates of Coke drink in a
day. 20 percent sells 1 crates per day, 16 percent sells ½ crates per day, 12 percent sells 3
crates per day and 8 percent of retailers sell less than half crates in day. From the above
table it may be inferred that the retail sales per store in generally between one to two
crates of Coke drink in a day.

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4.2.3 Size of bottles sold most
Table No. 4.2.3

Size No. of Respondents Percentage

200 ml 3 6%
250 ml 34 68%
500 ml 2 4%
1 liter 5 10%
1.5 liter 6 12%
Total 50 100%

34
35
30
25
20
15
10 6
5
5 3 2
0
200 ml 250 ml 500 ml 1 liter 1.5 liter

Source- Field Survey 2065

As shown in table 4.2.3, 68 percent of the retailers opined that 250 ml bottle has the
highest sales. Similarly, 12 percent of retailers sell 1.5 lit, 10 percent of retailer sell 1 lit. 6
percent of retailers sell 200 ml and 4 percent of retailers sell 500 ml bottles. From this
analysis it is clear that the most preferred size is 250 ml and the least preferred size is 500
ml bottle.

4.2.4 Type of Packaging preferred for selling

Table No. 4.2.4

Options No. of Respondents Percentage

Can 7 14%
Bottle 43 86%

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Total 50 100%

Source-Field Survey 2065

As shown in 4.2.4, 86 percent of the retailers opined that it is easy to sell Coke drink in
bottles. Only 14 percent of the retailers are found to say it is easy to sell Coke drink in
cans. The above table proves that it is easy to sell the Coke in bottles for the retailers.

4.2.5 Satisfaction from the Distribution

Table No. 4.2.5

Options No. of Respondent Percentage

Totally Satisfied 8 16%
Satisfied 35 70%
Dissatisfied 5 10%
Total Dissatisfied 2 4%
Total 50 100%

35
35
30
25
20
15
8 5
10
2
5
0
Totally Satisfied Satisfied Dissatisfied Total Dissatisfied

Source- Field Survey 2065

As presented in table no. 4.2.5, 70 percent of retailers are satisfied by the current
distribution, 16 percent if retailers are totally satisfied, while 10 percent of retailers are

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dissatisfied and 4 percent of retailers are totally dissatisfied. The analysis indicates that the
retailers in general are satisfied from the performance of the distributors of Coke in
Kathmandu.

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4.2.6 Reason for Preference to sell the Brand

Table No. 4.2.6

Reason No. of Respondents Percentage

Company give cash prize
Company gives scheme
I believe in the brand
The brand consumer like most
Other reasons
Total
0 0
7 14%
8 16%
33 66%
2 4%
50 100%

Index
0 14%
4% Com pany give cas h prize

Com pany gives s chem e

16% I believe in the brand

The brand cons um er like

m os t
Other reas ons

66%

Source- Field Survey 2065

As shown in table no. 4.2.6, 66 percent of the retailers like to sell Coke mainly because the
consumers like the drink most. While 16 percent of the retailers like to sell Coke because
they believe in the brand, 14 percent of the retailers prefer to sell the brand because the
company provides them with sales schemes. 4 percent of the retailers like to sell the Coke
for the other reasons.

4.2.7 Influence of advertising on sales

Table No. 4.2.7

Options No. of Respondent Percentage

Fully responsible 31 62%
Responsible to some extent 13 26%

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Not responsible 5 10%
Not Responsible at all 1 2%
Total 50 100%

31
35
30
25
20 13
15
5
10
1
5
0
Fully responsible Responsible to No. responsible No. Responsible
some extent at all

Source- Field Survey 2015

Table no. 4.2.7 shows that the retailers have high faith on advertising effect on sales as 62
percent of them suggested that the advertisement is fully responsible for the sales of the
brand. While 26 percent of retailers remarked that it is partly responsible for the sale of
brand, 10 percent of retailers declared that it is not responsible and only 2 percent of the
retailers declared that it is not responsible at all for sales. So, the above table has proved
that most of the retailers feel that the advertisement is responsible for the sales of the
brand.

4.2.8 Factors for Increase in sales of Coke

Table No. 4.2.8

Options No. of Respondents Percentage

Advertising should be more 6 12%
Decrease in Price 5 10%
To put Prize in Cork 14 28%
Increase in Quality 22 44%
Others 3 6%
Total 50 100%

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 25 22
20
15 14

10
6 5
5 3
0
Advertising Decrease in To put Prize in Increase in Others
should be Price Cork Quality
more

Source-Field Survey 2015

According to the table 4.2.8, 44 percent of retailers claim that the quality should be better
to increase the sales, 28 percent of retailers want the prize in cork, 12 percent of retailers
said that the advertisement should be increased, 10 percent of retailers want to decrease in
price and 6 percent of retailers said that other factors are better to increase the sales. From
the above table, it may be inferred that quality and sales schemes are essential to increase
in sales of Coke drink.

4.2.9 Sales Promotion Schemes to induces Sales

Table No. 4.2.9

Options No. of Respondents Percentage

Cash Prizes 26 52%
Coupon Prizes 8 16%
Item Prizes 11 22%
Others 5 10%
Total 50 100%

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 30 26
25

20
15 11
10 8
5
5
0
Cash Prizes Coupon Prizes Item Prizes Others

Source-Field Survey 2015

As shown in table 4.2.9, 52 percent of retailers said that cash prizes induces sales of Coke
drink, while 22 percent of retailers found that the item prize is more effective on sales, 16
percent of them are in favour of coupon prizes and 10 percent retailers are said that other
sales promotion schemes are better to induce sales of Coke. This indicates that retailers of
study area are in favour of cash prizes and item prizes.

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 Chapter- 5

Summary, Conclusion and Recommendations

This is the last chapter of this study. In this section, the researcher tried to present the
aggregate view expressed by specially the consumers of the Coke drink and on that basis,
the conclusion and recommendation have been concluded. Specifically, this chapter
includes summary, conclusions and recommendations.

5.1 Summary
Consumer is the king in modern business, the success and failure of any business firm
entirely depends on consumer's reactions to its offers. It is, therefore, essential for the
marketers or manufacturers of the products and services to understand the consumer
buying behaviour for long term survival in today's changing and competitive business
environment. However, understanding of consumer's behaviour is becoming more
complex and complicated day by day; it requires continuous efforts of investigations and
exploration of consumers. But, such practices of investigation and exploration on
consumers buying behaviour are too rare or entirely absent in Nepalese business
perspectives.

Bottlers Nepal Pvt. Ltd. has been producing Coke products under technical collaboration
with Coke Co. New York. The company is producing seven brands within different
flavours and packs. Coke drink has its competition with Pepsi.

Nepal is a small and poor country and so Nepalese consumers seems to be bias and they
use any products depending upon availability. Most of the marketing policies, strategies
and work forces are heavily borrowed from India. However, Nepalese market is small, the
researcher tries to enhance or support to understand the consumers' behaviour in Nepal.

This Study or research is very small. So, the researcher has set limited objectives. In this
study, the researcher has tried to find out the marketing of Coke in Kathmandu. Review of
literature includes conceptual review and review of previous studies in Nepal. In this

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study, the research methodology includes research design, population and sample, nature
and sources of data, data collection procedures and data processing analysis.

This study has been conducted to identify to consumers profile in the purchase of Coke in
Kathmandu. Its aim is to evaluate the impact of advertisement and sales promotion
schemes on sales of Coke and evaluate the distribution network and marketing strategies
of Coke Company. It also aims to measure the effect of sales promotion schemes on the
sales of Coke and tried to find out the effectiveness of advertising media in consumers
purchase decisions.

This study has been conducted through a survey of consumers and retailers. All together
50 consumers and 50 retailers opinions have been collected by administering
questionnaires. In consumer survey different age group, profession and educational
background related consumers consume Coke drink. Consumers of the study area are
thought that the most preferred time to take Coke in snacks time and the suitable place is
restaurant. Most of the consumers fifty eight percent of consumers consume Coke drink
for themselves and they consume Coke once a day. The most effective advertising media
is television. In the other hand, in retailer survey it has been found that sixty percent of
retailers have been running their business for last 5 years. Fourty four percent retailers
sold 2 crates of Coke and they like to sell Coke in bottle. The most preferred size is 250ml
in Kathmandu. In the study area retailers are satisfied from the performance of the
distributors of Coke in Kathmandu municipality. Sixty six percent of retailers like to sell
Coke because they believe in the brand. Retailers of the study area are suggesting that the
company should launched many sales schemes for the promotion of the Coke drink.

5.2 Conclusion
Consumers have their own interest in using various types of goods through which most of
them have almost the same type of nature for consuming. As analyzed in the above data
presentation and analysis chapter, we come to conclude as to the marketing to Coke drink
described by follows-

i) Bottlers Nepal Pvt. Ltd. produces the Coke products and it claims that it holds
65 percent of the market share and the rest by Pepsi.

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 ii) Seventy percent of consumers are generally found to consume Coke drink
during the snacks time and the most common place for having Coke drink by
consumer is restaurant (40 percent).

iii) The best reason for having cold drink is "quenching the thirst", followed by
quality, taste, for delight and other interest and hobby and most preferred size
is 250 ml, 72 percent of consumers preferred for this size, followed by 1.5 lit,
200 ml, 1 lit and 500 ml.

iv) Consumers are found to give higher preferences to the quality and taste in the
choice of Coke, moderate level prefer to price and advertisement and lower
prefer to the other factors.

v) Consumers firstly prefer to the most effective advertising media is Television.

Radio provides the second important effective media, followed by Magazine,
Hoarding board and other media.

vi) The frequency of consumption of Coke drink is quite high in Kathmandu.

Consumers who take Coke daily are about 30 percent. Consumers generally
purchase Coke drink for themselves or through their family members.

vii) Consumers are found often trying other brands as 20 percent respondents
change their brand to find new taste. About 40 percent consumers are found to
change their brand when their most preferred brand was not available. While
some consumers are found to change their brand because of price factor, when
competitive brand provided different sales schemes and very few due to
advertisements.

viii) In this study, it may be inferred that the retail sales per store in generally
between one to two crates of Coke drink in a day. Most of the retailers opined
that 250 ml size bottle has the most preferred size and it is easy to sell the Coke
in bottle.

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 ix) The study indicates that the retailers in general are satisfied from the
performance of the distributors of Coke in Kathmandu. The retailers are found
to prefer to sell Coke because of its high demand in the market.

x) The study reveals that the retailers have high faith on advertising for it's effect
on sales and it may be inferred that the quality and sales schemes are essential
to increase the sales of Coke. Retailers are found to prefer cash prizes to induce
sales of Coke, followed item prize, coupon prize & others.

5.3 Recommendations
Based on the conclusions derived from this study, the following recommendations have
been suggested to the companies selling Coke drink in Kathmandu.

i) Since consumers are found to give high weightage to "quenching the thirst"
and "for delight", the advertisements of the Coke drink should be built around
these two major attributes.

ii) As consumers are found to give higher preference to the quality and taste in the
choice of Coke, the advertisements should also be focused on these aspects.
Consumers have more exposure of Coke drink advertisements through the
television and magazines, so these media should be extensively utilized.

iii) Since consumers are found often trying other brands mainly to find new taste
or unavailability of the most preferred brand. So the companies should focus
on a better availability of their brands.

iv) Advertising of the company is dependent on Indian origin but in Nepal, it

should be focused on Nepali origin. In advertising, visuals & slogans should be
also oriented toward Nepalese origin.

v) Promotional schemes are not efficient; they are only focusing to wholesalers or
dealers. Therefore, the company should improve their promotional policy.

vi) The quality sales schemes are essential to increase the sales of Coke. Retailers
are found to prefer cash prizes to induce sales of Coke, followed by item prizes

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 and coupon prizes. Companies should focus on these sales for promotional
schemes.

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 Bibliography
Books

 Alderson, Wroe; "Marketing Behaviour & Executive Action" 1957, Homewood

III Richard D.Irwin.

 Agrawal, Govinda Ram; "Marketing Management in Nepal".

 Agrawal, Govinda Ram; "Marketing for small Business"

 Alderson, wore & P.E. Green, " Planning & Problem Solving in Marketing,"
1964 Homewood II, Richard D. Irwin Inc.

 Buell, Victor P; "Marketing Management", 1984 Mc Graw Hill book Company

USA.

 Carvens, David W; "Strategic Marketing Management", 1996, Hills Gerald E,

Woodruff Robert B, Richard D. Irwin Inc.USA.

 Koirala, Kundan Dutta; "Marketing Management" 2057, M.K. Publishers and

Distributors Kathmandu Nepal.

 Koirala, Kundan Dutta; "Marketing Decisions", Kathmandu: M.K. Publishers &

Distributors 2048.

 Kotler, Philip; "Marketing Management", 1998 Prentice Hall of India Pvt. Ltd.
New Delhi.

 Kotler, Philip; "The Task of Marketing Management", Journal of Marketing Vol.

37, October 1973.

 Kotler, Philip; "Marketing Management: "Planning Analysis & Control" 1980

Englewood Cliffs, NJ: Prentice Hall

 Kotler, Philip; "Marketing Management: Analysis, Planning, Implementation &

Control", 1991, New Delhi:Prentice Hall of India Pvt. Ltd.

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 DISSERTATIONS

 Pathak, Krishna Prasad; "Coffee Marketing System in Nepal", 1998, Central

Department of Management, Kritipur, MBA, Thesis.

 Thapaliya, Anup Kumar; "A study in market Situation of Instant Noodles "Yum-
Yum" (Case Study of Narayangarh)" 1999, Central Department of Management
Kirtipur, MBA Thesis.

 Lamichhane, Hari; "Marketing of Cold Drinks in Kathmandu", 1998, Prithivi

Narayan Campus, Pokhara, MBA Thesis.

 Bhatta, Shree Chandra, "Sales Promotion and Its effects on Sales", (A Case Study
of Beer Market of Nepal) 1998, Central Department of Management, Kirtipur,
MBA Thesis.

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 Appendix
Appendix -1

Questionnaires for Consumers

Lord Buddha Education Foundation

Sikkim Manipal University

(For the purpose of MBA thesis)

Marketing strategy analysis of Bottlers Nepal Ltd.

1. Have you tasted Coke?

a) Yes b) No

2. Which time generally do you prefer for having Coke ?

a) Before lunch b) Lunch c) Snacks d) Dinner

3. Which size of bottle do you prefer?

a) 200 ml b) 250 ml c) 500 ml d) 1 lit. e) 1.5 lit

4. Usually where do you prefer to have Coke?

a) Home b) Restaurant c) Picnic d) Festivals e) Others

5. What is good about the Coke you choose to have, So it comes in your mind first?

a) Taste b) Price c) Quality d) Others

6. Which one of the following so you prefer much while making a decision to buy a Coke?
Give 'no.1' to the first preferred and 'No5' to the last preferred.

a) Quality b) Price c) Taste d) Advertisement

e) Sale schemes f) Other Reasons.

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7. Why do you take Coke?

a) To quench Thirst b) For fun c) For delight/ freshness

d) For Taste e) For Quality f) Others

8. Which form of advertisement inspired you to have Coke?

a) Newspapers/ Magazines b) Radio c) Television

d) Hoarding/Banners/Posters e) Others

9. Do you change the brand after seeing the new advertisement?

a) Yes, I do b) No, I don't believe in ads.

10. Which form of advertisement do you think is more effective for Coke ?

a) Television b) Radio c) Magazines d) Hoarding Board

e) others

11. Do you change the brand? If you do, what are the reasons.

a) Because of non availability of my brand.

b) Because my brand's price has gone up.

c) Because of schemes given by other brands.

d) Because of advertisement.

e) In order to have new taste.

12. How many bottles of Coke do you take on an average?

a) One bottle a day b) Two bottle a day c) Once bottle a week

d) Twice a week e) Others

13. Generally who buys the Coke ?

a) My self b) Family members c) Friends d) others.

14. Having watching the advertisement or noticing the advertisement. When do you buy a
Coke ?

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 a) Immediately b) After watching the advertisement more often

c) After gathering more information d) As soon as I feel to drink.

15. I drink Coke, because

a) I like the brand name b) I like the taste c) To quaint thirst

d) It is high in quality e) For refreshment

f) Other reasons .....................

Name:- .......................................................

Age: 10-20 20-30

30-40 Above 40

Gender: Male:- Female:-

Educational Background:

Under SLC SLC/Int.

Graduate Above Graduate

Profession : Students Job Holders

Businessmen Others

Appendix - 2

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Questionnaires for Retailers

Lord Buddha Education Foundation

Sikkim Manipal University

(For the purpose of MBA thesis)

Marketing strategy analysis of Bottlers Nepal Ltd.

1. How long have you been running the shop?

a) Recently b) Less than one year c) Up to two years

d) 3 to 5 years e) More than 5 years f) 10 or more years.

2. How many crates of Coke do you sell in one day?

a) Less than one b) one to two c) Two to five

d) More than five e) More if any f) ................................

3. Which size of Coke bottles do you sell more?

a) 200 ml b) 250 ml c) 500 ml d) 1 lit. e) 1.5 lit.

4. Which one is easy to sell among the followings:

a) Coke in Bottle b) Coke in Can

5. Mention the level of Satisfaction you have with the service of distributors.

a) Totally Satisfied b) Satisfied c) Dissatisfied

d) Totally Dissatisfied

6. Why do you give more emphasis to sell Coke?

a) Because the company provides with 'Cash-reward'

b) Because the company provides with 'New schemes'

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 c) Because I believe in the brand.

d) Because People like the brand more.

e) Other reasons.

7. What reasons do you think of for the more selling of the Coke drink?

........................................................................................................

8. How does advertisement affect the selling of Coke?

a) Fully responsible b) Responsible to some extent

c) No responsible d) No responsible at all

9. Which one of the following should be done to boost up the selling of Coke?

a) More advertisement

b) More Prizes reward for consumers through promotional schemes.

c) Reduction of Price d) Emphasis on quality

e) Change in taste f) Others

10. Which of the following schemes does the company offers you?

a) Cash prizes b) Coupon prizes c) Items prizes d) Others

11. Which of the above schemes do you think as best? Mention the name
...................................................................

Name:- .............................................................................

Age:

Gender: Male: Female:

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Educational Background:

Under SLC SLC/Int.

Graduate Above Graduate

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