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A Project Report

On
MARKETING
MANAGEMENT
OF

SUBMITTED BY:

ARCHIT SHANKAR
74/BBA/JIMSG/2000

BBA (H) - SEMESTER VII


Coca Cola

JAGANNATH INTERNATIONAL MANAGEMENT


SCHOOL

Associated Beverages Pvt. Ltd.


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CONTENTS

TOPICS PAGES
Chapter One Introduction
1.1 Background and History of the Coca Cola 5
System
1.1.1 Coca Cola in India 10
1.1.2 Present profile of Coca Cola and its future 11
plans in India
1.1.3 The 3 A’s Strategy 14
1.1.4 The Manufacturing Process of Coca Cola 15
Brands
1.1.5 Objectives of the Project 17
1.1.6 Need of the Project and its Significance 18
1.1.7 Scope of the Project - Extent and Limitations 20
Chapter Two Research Methodology
2.1 Research Design 21
2.2 Data Collection Sources 21
2.3 Data Collection Methods and Instruments 22
2.4 Sampling Plan 24
Chapter Three Findings and Analysis
3.1.1 Findings from Questionnaire 26
3.1.2 General Findings from the Market 33
3.1.3 Analysis 36
Chapter Four Conclusions and
Recommendations
4.1 Conclusions
4.2 Recommendations 40

Bibliography
Appendix
Questionnaire for Consumers of Soft Drinks 42
Slogans Used to Advertise Coca Cola over the Years 45

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Fun-facts 46
LIST OF TABLES AND GRAPHS
Tables
Field Work Schedule
Favourite Soft Drink according to Age Group and
Gender
Coca Cola’s Bottling Plants All over India
Graphs
Favourite Soft Drink
Favourite Soft Drink according to Age Group and
Gender
Most Preferred form of Packaging
Second Favourite Soft Drink
Advertisements Play a Major Role in the Buying
Process
Sales (in cases) in 2001 – 2002

ACKNOWLEDGMENT

I would like to acknowledge my sincere thanks to Prof. A.K Sengupta and


Commander Seth and feel highly obliged to them for their expert guidance.

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I would also like to extend my heartfelt gratitude towards the helpful staff at Coca-
Cola India.

Through this project I have not only come across with the complexities of the
corporate world but also realized that how smartly these people work. Working for
this project has familiarized me with how the market works and the inherent
importance of advertising and research.

The project was a great source of learning and value addition for me. It has
opened me to the world of realities.

ARCHIT SHANKAR
Jagannath International Management School
Guru Govind Singh Indraprastha University

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1.1 BACKGROUND AND HISTORY OF THE COCA COLA

SYSTEM:

“Coca Cola stands today as the second most widely understood term in

the world after ‘Okay’.” ( Richard Tedlow, New and Improved : The

Story of Mass marketing in America). The Coca-Cola Company has

come a long way since Dr. John Styth Pemberton invented it in 1886 to

being the world’s most recognised brand. It was Mr. Robert W.

Woodruff, as president of the Coca-Cola Company, who brought Coca-

Cola to the international market, He had set three goals for the

company viz.,

• Trained Personnel

• Customer Service

• Quality Product.

Even after 80 years these three goals are still part of the formula for

success. Mr. Robert W. Woodruff also had a vision i.e. “To place Coca

Cola within an arm’s reach of desire. This literally means to make

Coca-Cola products available to consumers whenever and wherever

they might desire a drink.

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i . ex e
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The Coca-Cola company is a truly global beverage company in the

sense that it advertises in more than 650 dialects, conducts business in

46 currencies and pays taxes to more than 195 national governments.

Coca-Cola has even been on the moon!

The Coca Cola Company is organised into two business sector:

• The International Business Sector

• The North American Business sector.

The International Business Sector is divided into four groups:

• The Africa Groups

• The Greater Europe Group

• The Latin America Group

• The Middle and Far East Group

Coca-Cola India comes under the Middle and Far East Group. Each

group within the International Business sector has its unique challenges

and opportunities. While business may seem different in the different

regions, the same basic rules for achievement apply. Quality products,

superior customer service and aggressive marketing hold the key to

success.

The core competence of the Coca-Cola company lies in the basic

understanding of the properties of thirst. They believe that there are

5.8 billion people in the world, and each and every person gets thirsty
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for one time or the other. Each and every time they do, Coca-Cola has

an opportunity. It stands to fulfill the unquenchable desire of different

people all over the world and in doing so, translate thirst into tangible

results.

But how did Coca-cola achieve such great heights with such a simple

philosophy? This question can be best answered by the five enduring

realities. They are as follows:

They sell a universal product that meets a fundamental human

need: They sell a product with physical attributes that the human

palate enjoys, cutting across all barriers of culture, gender, age,

race and religion. Coca-Cola is associated with food, fun and

conversation which help create an atmosphere in which people

take a break and socializes. The average human body requires at

least 64 ounce of liquid everyday just to survive and Coca-Cola

accounts for not even 2 ounces. For every person on this planet

consuming 64 ounces is not an option, but choosing where these

come from, is

They are rapidly strengthening the world’s strongest brand:

By brand strength, Coca-Cola means the brand’s ability to deliver

value in the market place; to inspire people to pay more for it.

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Pushing relentlessly for building relevant value into Coca-Cola are

the three P’s...................

∗ Pervasive penetration in the market place

∗ Price Relative to value

∗ Preferred beverage everywhere

Their financial fundamentals are superior and reliable:

Three factors contribute to their ability to generate superior cash flow.

First, their capital requirements are very low for a business of their

size. Secondly, their business is not at all labour intensive; they

employ just 32,000 people worldwide. And third, unlike products

such as wine, Coca-Cola can go from production to consumption in

a matter of hours.

Coca Cola provides value to everyone who touches:

Coca Cola believes that everybody should get value from it-the bottling

partners, customers and ultimately people who buy and drink their

product. They strive very hard to ensure that they are different.

They do this in four ways - one, by investing heavily to ensure that

the Coca Cola is always within easy reach, virtually anywhere in

the world; two, by offering consumers a wide variety of packaging

choices; three, by consistently delivering beverages of the highest

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quality; and four, by linking the brand with one-of-a- kind events

and activities, such as the Olympic games, World Cup Cricket

(1996) etc.

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They know how to find opportunity other cannot see :

People at Coca Cola, whenever they walk into an environment, do

not see Coca Cola; they see where Coca Cola is not. They see an

infinite universe and they see those 64 ounces of opportunity.

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1.1.2 COCA COLA IN INDIA:

Coca Cola returned to India on the 24th October, 1993 after 16 years of

absence. The city of Agra, the home of the Taj Mahal and for many the

most enduring image of India, was chosen as the symbolic location for

the re-launch.

In India almost 96% of the soft drinks market is controlled by Coca Cola

and Pepsi. Coca Cola has a share of 47.8% and Pepsi 47.3% of the

Rs. 3,000 crore Indian soft drinks market. Between Coke and Pepsi

Rs. 120 crore is spent annually on advertisements and promotions.

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1.1.3 PRESENT PROFILE OF COCA COLA AND ITS FUTURE

PLANS IN INDIA:

Coca-Cola claims to have sold 60 million cases of its products between

1st January and 31st May which is a 30% jump in volumes over the

same period last year. Individually also Coca Cola has grown by 48%,

Thums Up has gone up by 33%, Limca has risen by 23%, and Fanta

volumes have swelled by an unbelievable 70%. On the other hand the

rival Cola giant Pepsi has grown by an impressive 42%. At this pace

Coca Cola hopes to close the year with around 128 million cases while

Pepsi hopes to do 105 million cases.

Also an ORG - MARG survey conducted for Coca-Cola shows that the

top - of - the - mind awareness gap between Pepsi and Coke is

narrowing down every month. In August, 2002, only 19.4% of a sample

soft drinks consumer population recalled seeing a coke advertisement

while 37% remembered Pepsi instantly. By November, the same year

the figures were - 21.6% were aware of Coke and 33.7% knew about

Pepsi, In March 1998, the gap had filled further with 32% aware of

Pepsi and 30.4% appraised of Coke.

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Between 1993, when Coca Cola acquired the Parle Soft Drinks

Division, and 1997, its overall market share had dropped from a

comfortable 69% to 51% while Pepsi zoomed from a paltry 17% to 40%

during the same period. Pepsi’s gains came from market growth and a

large chunk of it was at the expense of Coke.

In India Coca Cola has an established bottling infrastructure comprising

of 52 bottling plants and a portfolio of eight strong brands. Each of

these brands has a character of its own. Thumbs Up has the macho

image targeted towards the 20-29 year olds; Fanta is the ‘fun drink’ the

first love of 13-19 year olds and Limca has the ‘take it easy’ image. The

brands Coca Cola, Thums Up, Limca and Fanta have been identified as

national brands in India.

Coca Cola is now planning to set up four down stream bottling

companies and the franchisee bottler is being given two options to

either join hands or sell out . Of the 52 bottlers in India only 12 have

formed joint ventures so far and that two mainly in the south. Another

ten bottlers are sitting on the fence.

The backbone of success of Coca-Cola has been the bottler, the

franchisee in partnership and the local operating unit of the Coca-Cola

system.

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The Coca Cola company works with bottler partners all around the

world to create effective operating units at the local levels. The ties that

bottlers have with local customers, consumers, governments, banks,

entrepreneurs, charities and sports organisation are critical to the

success of the Coca Cola system.

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1.1.4 THE 3 A’S STRATEGY

The 3 A’s, namely, availability, affordability and acceptability has its


focus on the customers and consumers. It is basically a strategy to
reach increasing number of consumers.

Availability : The main challenge of Coca Cola is to place its


products “within an arm’s reach of desire’. This it
plans to do with improved or innovative new
packaging, dispensing systems, distribution
systems and marketing programs.

Affordability : Coca Cola addresses this aspect by making the


products available at a price affordable to the
consumer. This is done by continually focussing on
making the production and distribution system more
efficient and cost effective.

Acceptability : Acceptability requires the product to be of the


highest quality. Also acceptability can be effected
through advertising, sponsorships, promotions
community programs etc.

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1.1.5 THE MANUFACTURING PROCESS OF COCA COLA


BRANDS

Coca Cola products reach the consumer through a variety of different


beverage systems, including bottles, cans and fountain drinks. The
exact steps in the process differ depending on the beverage system
used.

For the bottle or can beverage system, the ingredients are pre-mixed
and the beverage is ready to drink. This beverage system includes
returnable glass bottles of 300 ml (RGB) and cans. The glass bottles
are cleaned and rinsed.

The fountain beverage system is also called the post-mix beverage


system. It involves dispensing systems where syrup and carbonated
water are mixed together. The syrup for post-mix is store in stainless
steel tanks or Bag-in- Box containers in a near by storage area and
piped to the dispensing system. A carbonator is located in the
dispenser cabinet and mixes carbon-dioxide with locally supplied water.
The syrup and carbonated water are cooled and mixed by the
dispensing system in a specific proportion to get the ultimate product.

For the pre-mix beverage system carbonation is the final step. It is


done after the mixing of the syrup and water. To protect the unique
flavours that are associated with the products of the Coca Cola
concentrate and beverage bases are kept secret.

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Moreover water treatment is given special emphasis. Since water


quality and character varies from place to place, a treatment process is
utilized to create water, which meets an exacting standard. Uniformity
of water is critical to ensure that every Coca Cola beverage, no matter
wherever it served, will taste exactly the same. The treatment usually
requires chemical treatment followed by filteration through a series of
sand and activated carbon filters. The treatment process varies in each
area because it is specifically designed for local water condition.

All through the production process, quality control personnel take


samples of the product on a regular basis. These samples are taken to
a specially equipped lab where they are tested for quality and to ensure
the correct proportion of ingredients.

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1.1.6 OBJECTIVES OF THE PROJECT:

The soft drink business in India is worth more than Rs. 3,000 crores.
Between April and July almost 50% of the annual sales take place. In
the northeast of India almost 60% of the sales take place in these four
months of the year. Also, Guwahati, the gateway to the northeast, is
solely responsible for 60% of the annual sales of Associated Beverages
Private Limited.

One of the values of the Coca Cola system is presence - that Coca
Cola should exist everywhere and should be available to anyone who
wants a drink, whenever and wherever, on this planet. To fulfill this
goal just producing high quality products is not sufficient. An effective
distribution system holds the key to this ultimate goal. Distribution
includes the activities of sales delivery, merchandising and local
account management.

The main objective of this project is to study the distribution network of


Coca Cola in Delhi and find out the various drawbacks and
shortcomings of it. This project also aims to provide suggestions to
remedify the flaws in the distribution system. Also this project tries to
study the behaviour of consumers towards their preferred brand of soft
drink and what they desire from the company.

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1.1.7 NEED OF THE PROJECT AND ITS SIGNIFICANCE

Approximately 70% of Coca Cola beverage purchases are impulse

purchases. This means that when the consumer enters a retail outlet

he did not have any intention in mind of purchasing, but on impulse he

made the purchase. To promote impulse purchasing two factors is very

critical. They are :

∗ Availability

∗ Visibility

Availability means that the products should be available to the

consumer wherever he is and whenever he demands it. Visibility

means that the products or its trademark should be very much

prominent and visible to the consumer so as to promote impulse

purchase.

But the very first factor of ‘availability’ is a major problem in the Delhi

market. But this is not the case in all parts of the city. During the peak

summer season parts of the city simply go dry and remain so for days

together. At the same time other parts of the city has ample stock.

This non-availability reflects very poorly on the world’s most recognised

brand’s image, not to say the effect it has on the sales of the company.

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Moreover, Coca Cola is not facing much of a competition from its

traditional arch rival Pepsi. This is because the only bottling plant of

Pepsi in the northeast of India is in Dimapur, Nagaland and its capacity

is very less to cater to the whole of this region. It caters to the

population of Nagaland and parts of upper Assam bordering Nagaland.

this is the only reason why Pepsi has no visible presence in Delhi and

why it has not been able to penetrate into the strong Coca Cola market.

But now Pepsi is setting up a bottling plant in Rani, very close to Delhi

which will have the same capacity as the Coca Cola plant. This bottling

plant which is due to start operations in September 1998, will then cater

to the whole population of the northeast. Now, if the glaring

deficiencies of Coca-Cola in its distribution network are not remedied

than Pepsi will certainly succeed in eating into a sizable chunk of the

Coca-Cola market.

For these above reasons this project is significant to Associated

Beverages Private Limited so that they do not lose out its strong hold

on the Delhi market when their arch rival Pepsi enters the battle field.

For me also this project is of great significant, as after having chosen

marketing as a career this project has given me an opportunity to get

an insiders view of operations of one of the world’s most recognised

brands.

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1.1.8 SCOPE OF THE PROJECT - EXTENT AND


LIMITATIONS

This project is limited only to the Delhi market of Coca Cola and studies
only the distribution network within the city. It does not study any other
market to its distribution. But Delhi being itself responsible for 60% of
the total annual sales of the company this project is of some
significance and can be said to be somewhat representative of the
whole northeast of India.

Moreover, this study relates only to the urban consumer and as such
has no relevance to the psyche of the rural consumer. As such this
project is limited only to the urban market of Coca Cola.

Also, one of the brands of the company viz. Bisleri Club Soda does not
come under the scope of this project as its target market is totally
different from the soft drinks market.

This project covers all the twelve distributors and the retail outlets under
the company within Delhi city.

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2.1 RESEARCH DESIGN

This project is more of a qualitative study than a quantitative study.


Since this project aims at studying the deficiencies of the distribution
system of Coca Cola brands in Delhi city, the best way to do it is to
check out first hand the efficiency and effectiveness of the distribution
network by personally going to the market and talking to the
distributors, retailers and consumers.

Also, to go to the consumers, a questionnaire was designed for


knowing the preferences of consumers and the various factors which
affect their preferences.

The qualitative analysis of this project is mainly based on first hand


observation of the market, the way it functions and by having
unstructured conversations with distributors, retailers and consumers.

2.2 DATA COLLECTION SOURCES

The data mostly collected, such as sales figures of previous years,


number of distributors, retailers etc. were obtained from the company
office itself. Moreover, other secondary data such as National Market
share of Coca Cola brands etc. were obtained from magazines such as
Business India and newspapers like The Times of India. The primary
data was obtained from the questionnaires administered on consumers.

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2.3 DATA COLLECTION METHODS AND INSTRUMENTS

The data collection method for this project begins with finding a sample
of the population. The population for this project was the entire Delhi
and finding a fairly representative sample of this population can never
be perfect.

At the very beginning the whole market was divided into twelve zones
each having one distributor of Coca Cola and samples proportionate to
the number of retailers the distributor caters to are taken. Again from
each distributor zone the sample taken was at random. There was no
set pattern to select a sample. Moreover, there may be a bias in the
findings, since a majority chunk of the sample were consumers at the
point-of-purchase in market places, parks, cinema halls etc. The
distributors all over the Delhi has 7920 retailers under them, which
include pan-Walla’s, school canteens, institutional or office canteens
etc. The distributors do not serve equal number of retailers individually.
Keeping this in mind the sample size taken from each distributor zone
is proportionate to the number of retailers in each zone.

The instrument for data collection was a structured questionnaire


targeted towards soft drinks consumers. This questionnaire was to
know the tastes and preferences of consumers of soft drinks.

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As far as interacting with distributors and retailers of Coca Cola


products there was no fixed structure. The mode of communication
was informal and friendly conversation, which does not limit discussion
within a well-defined boundary. This helps in listening to the distributor
and retailers what they have to say, because prime importance needs
to be given to this, as they are the people who stay in the market the
whole day.

Informal and friendly conversation also allows the mask, that one wears
when doing business, to be dropped to accommodate free flow of
thoughts and ideas. By going to the market and just watching how a
consumer buys a Coca Cola and how a retailer sells it, one can get a
good idea of the operations of the market also.

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2.4 SAMPLING PLAN

The sampling plan was basically random. The sample size chosen was
450 consumers of soft drinks from all over the Delhi city. This sample
size was divided into twelve distributor zones, each zone being the
allotted area to be covered by a distributor. Since, the distributors
within their respective zones serve different number of retailers the
division of samples to the twelve zones cannot be equal. the number of
samples out of the 450 samples to be chosen from each distributor
zone is proportionate to the number of retailers within the parameter of
each zone. All the distributor zones have a total of 7920 retailers.
Similarly for distributor zones having around 1000 retail outlets the
number of respondents chosen was 55 and so on. This way each
distributor zone was represented in a fairly representative manner. But
even then, a bias will be there as the number of consumers being
served by all the retailers are not equal and in some cases there are
vast differences. Due to the non availability of the figures of the exact
consumer size covered by each retailer this bias is inevitable.

Also the respondents chosen were mostly near points-of -purchase with
a soft drink bottle in one hand. These respondents were chosen at
random from parks and recreation centres such as cinema halls etc.

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The questionnaire was targeted at individuals and not households.


This was because every individual is a consumer or potential
consumer. A household may contain more than one consumer and
sometimes it so happens that the tastes and preferences of family
members may not be alike.

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3.1.1 FINDINGS FROM THE QUESTIONNAIRE:

Favourite soft drinks

Out of the 450 soft drink consumers surveyed 121 voted Thums Up
as their favourite soft drink, which is 26,8%

110 respondents voted Coca Cola as their favourite soft drink, which
is 24.4%

59 respondents preferred Pepsi as their favourite soft drink i.e.


13.1%

Fanta and Mirinda were very close to each other with 54 (12%) and
52 (11.5%) of the respondents respectively naming these two
brands as their favourite

Limca finds itself at the bottom of the market with just 42


respondents (9.3%) voting for it

12 of the respondents 92.6%) voted for other brands such as frooti,
onjus etc.

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FAVOURITE SOFT DRINK

Others
Limca
2.6% Coca-Cola
9.3%
Mirinda 24.4%
11.5%

Fanta Pepsi
12%
13.1%
Thums-Up
26.8%

Males Females
Age Group less than 20 20-40 above 40 Less than 20 20-40 above 40
(in years)
Coca Cola 31 23 10 21 17 8
Pepsi 16 12 5 11 9 6
Thums Up 34 25 11 22 19 10
Fanta 15 11 5 10 8 5
Mirinda 14 11 5 9 9 4
Limca 12 9 4 8 7 2
Others 3 3 1 3 2 0
Total 125 94 41 84 71 35

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FAVOURITE SOFT DRINK ACCORDING TO AGE GROUP


(MALES)

35

30

25

20
Ma les les s th an 20
Ma les 20-4 0
15
Ma les abov e 4 0

10

0
Coc a- Cola Peps i Thums - Up Fan ta Mir inda Limc a O th er s

FAVOURITE SOFT DRINK ACCORDING TO AGE GROUP


(FEMALES)

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25

20

15
Fe ma le s le s s th a n 2 0
Fe ma le s 2 0 - 4 0
10 Fe ma le s a b o v e 4 0

0
Co c a - Co la Pe p s i Th u ms - Up Fa n ta Mir in d a L im c a O th e r s

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 Preferred form of packaging

 292 out of 450 respondents (64.8%) preferred the returnable glass


bottle (RGB) form of packaging

 81 respondents (18%) voted for cans as their form of packaging

 65 respondents (14.4%) preferred the one and a half litre carry away
PET bottles to other forms of packaging.

MOST PREFERRED FORM OF PACKAGING

300

250

200

150

100

50

0
Returnable Pet bolltles Can
Cans
glass
bottles

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 Criteria for being the favourite drink

 204 respondents preferred their favourite soft drinks for its taste /
flavour (45.3%)

 Brand Image is the second most important criteria for being the
favourite as 136 respondents (30.2%) have to say

 64 respondents (14.2%) have cited advertisements/promotions as


being the criteria for being the favourite soft drink

 Price came third as a criteria for purchasing a soft drink with 32


respondents (7.1%) voting for it

 Availability was a criterion for only 14 respondents (3%) for being


the favourite soft drink.

 182 respondents questioned do not buy any other available soft


drink if their favourite soft drink is not available. The rest 268 go for
other available soft drinks.

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The second choice in case the favourite soft drinks is not


available is as below :

 66 respondents each prefer Coca Cola and Pepsi respectively

 Thums Up came in second with 54 respondents voting for it

 Fanta scored 36 votes as second preference

 25 respondents prefer Limca in case of non-availability of their


favourite soft drinks

 Mirinda comes in at the bottom with only 21 respondents answering


to it as their second preference

SECOND FAVOURITE SOFT DRINK

Limca
Mirinda 9.3% Coca-Cola
7.8% 24.6%

Fanta
13.4%

Pepsi
Thums-Up
24.6%
20.1%
%

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 To the statement whether “television advertisements play a major


role in the buying process of soft drinks”, the response was
somewhat like this :

 156 respondents “Strongly agreed” to it

 206 respondents simply “agreed” to it

 65 respondents were “neutral” to this statement

 19 respondents “disagreed” to this statement

 4 respondents “strongly disagreed” to this statement

ADVERTISEMENTS PLAY A MAJOR ROLE IN THE BUYING


PROCESS

250

200

150

100

50

0
S tr o n g ly A gree N e u tr a l D is a g r e e S tr o n g ly
agree d is a g r e e

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3.1.2 : GENERAL FINDINGS FROM THE MARKET

 The sales figures (in number of cases) for Delhi for 2001 – 2002 are
as follows :

Sales (in cases) 2001 2002

Target 2,79,000 2,86,000

Actual 2,85,000 3,10,000

SALES (IN CASES) IN 2001 – 2002

310000
305000
300000
295000
290000
285000
280000
275000
270000
265000
260000
2001 2002

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 The rate of visibility of Coca Cola products in comparison to its


traditional rivals Pepsi was very high .

 Pepsi products were found only in a few outlets whereas Coca Cola
products had its presence all over the city.

 But at the same time Coca Cola products sometimes were visible
only as empty cases in parts of the city with stock running out while
other parts of the city had ample stock. This condition of parts of the
city going dry while other parts were amply stocked sometimes
continued for a week.

 The most common answer to this problem given by the retail outlets
to the consumers was “ no supply ”. This means that the company
has not been able to produce and supply as per the existing demand
of the market.

 The Burnihat bottling plant had a capacity of filling 120 bottles per
minute which was doubled in 2001 to 240 bottles per minute.

 Beside this plant, there is one more bottling plant of Coca Cola
products in Jorhat, in upper Assam. But, it does not have bottling
facilities for Coca Cola and Fanta. It caters only to Jorhat district and
parts of Nagaland bordering Assam.

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 Pepsi’s virtual absence in Delhi can be attributed to the fact that in


the whole northeastern region it has only one bottling plant in
Dimapur, Nagaland that is of lesser capacity than the Coca-Cola
Burnihat plant. This plant caters to the states of Nagaland, Mizoram,
Tripura and parts of upper Assam bordering Nagaland. In Delhi most
of the Pepsi stock comes all the way from Pune.

 The distribution of Coca Cola products in Delhi is not very complex.


Mostly it is a matter of few hours between production to
consumption. After production, the products are distributed,
according to the requirements, to the twelve distributors within the
city. These distributors then redistribute the products to the retail
outlets present in their operational territory.

 The raw materials for productions such as the concentrate, sugar


and carbon dioxide all come from Calcutta. This is done to maintain
the standard level of purity of sugar and carbon dioxide all over the
world.

 The most important piece of news for Coca-Cola in Delhi is that its
archrival Pepsi is setting up a bottling plant at Rani, in the outskirts of
Delhi with a capacity equivalent to the Burnihat plant. This plant at
Rani, which is planned for commencement of operations from
September/October 1998, will then cater to the whole soft drinks
market of the Northeast. The competition after commencement of
operations of the Pepsi plant is bound to get heated up.

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3.1.3 ANALYSIS

 The population of Delhi as of now is approximately 18,50,000 and if


we relate this to the sales figure of 2002 we will get a rough estimate
of the per capita consumption of soft drinks in the city. The sales
figure for 2002 was 3,10,000 cases i.e. (31,10,000 x 24) bottles
which is 74,40,000 bottles. This way the per capita consumption
comes to 74,40,000 / 18,50,000 = 4.02 bottles. This means that
every individual consumer consumes approximately 4 bottles of soft
drinks annually.

Now by the year 2000 population is expected to rise to around


19,17,000 which will be an increase of around 3.62%. If it is
considered that the per capita consumption remains constant, then
the demand will also increase like wise i.e. 11,222 cases bringing it
to around 3,21,222 cases. Now, this figure of 3,10,000 cases
achieved in 2002 is not the demand, but supply. And in Delhi
demand is always more than supply (figures from : Statistical Hand
book; Govt. of Assam, 1995)

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 Data collected from the questionnaire ranks Thums Up as the most


preferred soft drink followed by Coca Cola, Pepsi, Fanta, Mirinda,
Limca and others respectively in that order. The “other” soft drinks
mainly include tetrapack fruit juice beverages such as Frooti, Onjus
etc.

Thums Up 26.8%
Coca Cola 24.4%
Pepsi 13.1%
Fanta 12%
Mirinda 11.5%
Limca 9.3%
Others 2.6%

The popularity of Thums Up can be attributed to the fact that it already


had a strong market presence even during the times it was with the
Parle soft drinks division before Coca Cola made its entry into India.
But even after five years of its existence in India, Coca Cola has not
been able to overtake its sister brand in terms of market share in Delhi
city.

 Taste/flavour and brand image are the two most important factors
why Coca Cola products are purchased with 45.3% and 30.2%
respondents voting for it.

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 Coca-Cola’s multi local approach to marketing is designed to meet


the needs of the local consumers. It approaches marketing in a
global sense, but works with each area on a local basis, through a
joint partnership between the Coca Cola Company and the bottlers,
which in Delhi is Associated Beverages Private Limited.

 The distribution of Coca-Cola products includes the activities of


sales, delivery, and merchandising and local account management.
In the conventional sales system the demand of all retail outlets on
a particular route are estimated and a truck is loaded accordingly.
The route sales person discusses with the customers his actual
needs at the business location and unloads the product, stocks the
shelves and merchandises accordingly. The sales person is also
responsible for local account management, which involves
managing the financial part of the transaction, developing and
maintaining rapport with the retailer and looking for additional sales
opportunities.

By looking for new sales opportunities, the sales person can help
the retailer improve his business. For example, the salesperson
might identify opportunities for the retailer to sell more products or
consider what additional product consumers may want.

Another type of sales technique is called the Advance sell or Pre-


sell system. In this system, a sales person calls on each retailer
with the specific purpose of making a sales call, but does not
actually deliver the products. The sales person establishes rapport
with the retailer, discusses new sales opportunities and
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merchandises the products ordered, usually the following day and


does additional merchandising.

The above two systems were direct distribution system. The other
form of distribution system wherein an organisation which is not
part of Coca Cola system i.e. the distributor, has control over the
elements of distribution viz. delivery, merchandising and local
account management

In Delhi there are twelve authorised distributors who control the


four vital elements of distribution. Each of these distributors is
allotted a fixed number of empties (i.e. cases with empty bottles).
Suppose a distributor is allotted 1000 empties. The distributor may
return say 500 empties and get them filled up. These filled cases
are then sent to the retail outlets within the distributor’s zone of
operations. Till the time these cases come back as empties the
other 500 empties are filled up by the bottler and in this way the
cycle goes on.

The distributor gets Rs. 10 as commission per case. Moreover,


each distributor is given a target to achieve and if it succeeds in
achieving the target he is given an additional Rs. 2 as incentive on
the total sales. For example, if the distributor is given a target of
15,000 cases to be sold and he achieves 16,000 cases, then his
total commission will be Rs. 12 x 16,000 = Rs. 1,92,000. But if he
achieves a sales of 14,000 cases then his commission will be Rs.
10 X 14,000 = Rs. 1,40,000.

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4.1 RECOMMENDATIONS

To rectify the above deficiencies the following suggestions may be


helpful to the company.

 The capacity of the bottling plant needs to be increased. But this


may not be feasible keeping in mind the constraints of the company’s
financial strength. In that case, the company should go in for a joint
venture with Coca-Cola India, which will go a long way in facilitating
an increase in the plant capacity or setting up another plant.

 The operations of the distributors should be more closely scrutinized


so that they cannot encroach on others territory. For this a watertight
map of the distributor zones should be made. The distributors
should be made accountable for any deficiency in their respective
areas of operation. This will go a long-way in ensuring that no area
goes dry for days together and will also promote more product
visibility.

 Suppliers of carbon dioxide and sugar can be appointed within the


state after strict quality control tests and constant monitoring
thereafter. This will go a long way in cutting down transportation
costs and the hassles involved will be eliminated. Also, this will
generate employment for the local masses and the company can
earn goodwill of the public, which in turn will inevitably promote
sales.

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 Lapses in communication can be very crucial as in this industry the


average time period from production to consumption can be just a
few hours. When a concentrate of Coca-Cola is needed and
concentrate for Thums Up comes in, it may result in Coca-Cola
vanishing from the market for one day or two. As such this type of
communication lapses has to be avoided at any cost.

 It is now high time for the company to chalk out a strategy to battle
Pepsi because all this time Pepsi did not offer any sort of
competition to Coca Cola. The company now need to pull up its
socks and start setting its house in order, as Pepsi is about to make
a big entry into the Delhi market.

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QUESTIONNAIRE FOR CONSUMERS OF SOFT DRINKS

Respondent’s Name
Sex: Age: Occupation:
Please tick your choice or answer wherever necessary:
1. Which is your favourite soft drink?
(a) Coca-Cola (e) Mirinda
(b) Pepsi (f) Limca
(c) Thums Up (g) Others (please specify)
(d) Fanta

2. What makes this soft drink your favourite ?


(a) Taste/Flavour (d) Easy Availability
(b) Price (e) Advertisement/promotions
(c) Brand image (f) Others (please specify)

3. What form of packaging do your buy most?


(a) 1 1/2 Litres carry away per bottle
(b) 300 ml bottle
(c) 330 ml Can

4. Do you buy your soft drinks daily?


Yes/No

5. How much do you consume daily?


(a) 1 bottle (c) 4/5 bottles
(b) 2/3 bottles (d) more than 5 bottles

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6. In case you do not find your favourite soft drink with your retailer
do you buy any other alternative?

7. How does your retailer explain the non-availability of your


favourite soft drink?

8. Which is your favourite soft drink advertisement?


Please specify where you saw it?

9. Television advertisements play a major role in the buying


process of soft drinks?
(a) Strongly agree (b) Agree (c) Neutral (d) Disagree
(e) Strongly disagree

10. Can you suggest improvements to make your favourite soft


drinks even better?
(Thanks for your cooperation)

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COCA COLA’S BOTTLING PLANTS ALL OVER INDIA

LOCATION BOTTLING LOCATION BOTTLING


PLANTS PLANTS
Ahmedabad Britco Foods Kanpur Jahind Bottling
Amritsar Amritsar Beverages Khamama Sri Saravaraya
Sugars
Aurangabad Waluj Beverages Kurnool Bharat Cottling
South East
Bangalore Brindavan Lucknow Brindavan Bottlers
Beverages
Bareilly Hindustan Bottling Ludhina Ludhina Beverages
Bhopal Vishal Beverages Madurai Madurai Soft Drinks
Bhubhaneshw Manna Drinks Mangalore Souparnaca
ar Beverages
Bilaspur Narmada Drinks Mumbai Parle Beverages
Calicut Madurai Soft Drinks Nagpur Superior Drinks
Chandigarh Kandhari Beverages Najibabad Hindustan Bottling
Chennai Chennai Bottling Nasik Nasik Beverages
Dankuni Black Diamond Nellore Pinakini Beverages
Beverages
Delhi Delhi Bottling Patalganga Parle Bottling
Faizabad Amrit Bottlers Patna Orient Beverages
Ganganagar Ganganagar Pune Orient Beverages
Bottling
Ghaziabad Moon Beverages Rohtak Haryana Drinks
Guntur Model Bottling Sahibabad Coolade Beverages
Gurgaon Enrich Agro Food Surat Surat Beverages
Products
Guwahati Associated Tarapur Dobule Cola
Beverages Beverages
Hathras Brindavan Agro Taratala Black Diamond
Beverages
Hyderabad Bharat Bottling Trivandrum Hind. Bottling South
South East West
Indore Indore Bottling Udaipur Mewar Bottling
Jaipur Jaipur Bottling Varanasi Varanasi Bottling
Jammu Jammu Bottling Vemagiri Sri Saravaraya
Bottling
Jamshedpur Jamshedpur Vijaywada Vijaywada Bottling
Bottling
Jodhpur United soft Drinks Visakhapatna V.B.C. Industries
m
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4.2: CONCLUSION

The Rs. 3,000 crore soft drink businesses in India score its biggest hit-
almost 50% of all soft drink sales - between April and June. And it is
during this period that the Delhi market goes dry from time to time.

70% of soft drink sales is through impulsive buying i.e. the consumer
comes to the retail outlet without any intention to buy but on impulse
actually purchase a soft drink. To promote these purchasing two
factors are very important. They are :

∗ Availability
∗ Visibility

If even one of these factors is lacking then a big chunk of sales can be
lost. In Delhi the following deficiencies need to be rectified by Coca-
Cola to retain and increase its present market share:

 The capacity of the bottling plant, inspite of being doubled to 240


bottles per minute is still not sufficient to meet the huge of the
market.

 The distributors, inspite of having areas of operation do not stick to


them but try to grab markets of each other to increase their sales.

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 The basic ingredients like sugar and carbon dioxide is brought all
the way from Calcutta and the flow of goods is not smooth because
of the volatile political and highly militant atmosphere of the
northeastern region.

 The communication gap between the supplier and bottler can prove
costly if its frequency increases during the peak season.

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BIBLIOGRAPHY

 Business India

 India Today

 Marketing Management
By Philip Kotler

 Marketing Research - Text and Cases


By H.W. Boyd, R. Westfall and S.F. Stasch

 Research Methodology
By C.R. Kothari

 Statistical handbook; Govt. of Assam, 1995.

 The Times of India

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PREFACE

This is to certify that Archit Shankar has

completed his project report under the guidance

of ____________________ on the topic Marketing

Management of Coca Cola India, as a pre-

requisite of B.B.A. (H) – Semester 7th.

Signature

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