A STUDY ON

CONSUMER PREFERENCE
IN
HINDUSTAN COCA-COLA BEVERAGES PVT.LTD,
ATMAKURU”
A PROJECT WORK SUBMITTED TO

KRISHNA UNIVERSITY, MACHILIPATNAM.

In partialfulfilment of the requirement for the award of

the degree of

BACHELOR OF BUSINESS ADMINISTRATION

Submitted by
K.JANAKIRAM REDDY
Regd. NO:Y176194013

UNDER THE GUIDANCE OF

MR SATYENDRA KUMAR (FACULTY GUIDE)
 CERTIFICATE

This is to certify that the project entitled “A STUDY ON CONSUMER

PREFERENCE TO COCA-COLA PRODUCTS IN HINDUSTAN COCA-COLA
BEVERAGES PVT.LTD – ATMAKURU” has Being submitted by K JANAKIRAM
REDDY Bearing register number Y176194013, belongs to department of Business
Management studies, sri krishnaveni,Degree kalasala, Vijayawada under my guidance
in partial fulfilment of the award for the Degree in Bachelor of Business
Administration. For the period 2017-2020
 DECLARATION
K JANAKIRAMREDDY (Y176194103) hereby declare that the project entitled
“CONSUMER PREFERENCE” AT HINDUSTAN COCO COLA BEVERAGES ATMAKUR
PRIVATE LIMITED has been prepared by fulfilment of the requirement for the
BACHELOR OF BUSINESS ADMINISTRATION

I also declare The matter presented has not been submitted to any University/Institute
for the award of Bachelor Of Business Management Degree.

K.JANAKIRAM REDDY

Regd.No. (Y176194013)
 ACKNOWLEDGEMENT

I feel immense pleasure and proud to be a part of sri krishnaveni degree kalasala of
business administration that has nurtured me to the present state and I feel grateful
towards it.

Firstly I would like to thank Mr Sai Krishna.YMBA,MPhil,M.s.c,ISO head of the

department and also project guide Mr satyendrakumar who was a constant source of
any encouragement.

I express my sincere thanks to Hindustan Coca-Cola Beverages Pvt.Ltd ,for allowing

me to undertake a project in their company. I was under the continuous and valuable
guidance of Mr. S. Srinivasa rao, HR Manager that I was able to complete the work
entrusted to me.

Lastly I would like to thank our college Mrs. BHULAKSHMI Principal of sri
krishnaveni Degree kalasala,vijayawada

K. JANAKIRAMREDDY

Regd. NoY176194013
 CONTENTS

UNIT 1 INTRODUCTION
UNIT 2 2.1-INDUSTRY
PROFILE
2.2 COMPANY
PROFILE

UNIT 3 RESEARCH
METHODOLOGY
(TITLE,NEED
,SCOPE,
OBJECTIVE,
LIMIT AND DATA
COLLECTION)
UNIT 4 ANALYSIS AND
INTERPRETATION
UNIT 5 FINDINGS,
SUGGESTIONS
AND
CONCLUSIONS
UNIT 6 BIBILOGRAPHY

UNIT 7 APPENDIX
 UNIT - 1

INTRODUCTION
 INTRODUCTIION

Marketing is not a process of selling goods to customers. It is an art of marking them

Buy our goods again and again

Marketing is social and management process by which individuals and

groups obtain what they want and need through creating, offering, exchange and
transaction products of value with them
.
Marketing Management is a process of planning and executing the
conception, pricing, promotion, and distribution of goods and services to create
exchange that satisfy individuals and organisation goals

Thus, marketing starts with identifying the target customers and ends with satisfied
customers. Management of all the activities between these customers is the
responsibility of the marketing managers.

CONSUMER MARKETS:

Individuals and households for their personal consumption can be defined as a

consumer market

Beverage industry is generally considered to typical consumer goods,

Beverage industry is one of the most profitable industry in the market. Beverage
Industries at present are facing boom period in india
Beverage industry is generally classified into:
1. Alcoholic drinks

2 .Non alcoholic drinks

Non alcoholic beverages again divided into:

1. carbonated Soft Drinks (C.S.D)

2. Fruit juice

The soft drinks again divided into:

1. cola based

2. Non cola based

The Non cola based segment has orange, clear lemon, cloudy lemon and

soda. Fruit juice include watermelon, mango, apple and pineapple . The cola segment,

which consider to be giving some type of fuzziness and satisfaction , is fast growing in

India . This is the reason why soft drinks marketers are fighting tooth and nail to

establish their leadership in market

 CONSUMER PREFERENCE
The marketing concept is built on the promise that markets first identify consumer

needs and then develop products and service to satisfy those needs . consumer

researcher offers asset of diverse methods to identify such needs. Consumer research is

Also used to better understand consumption behaviour. It is used to identify and locate

Appropriate target markets and to learn their media habits .It is used to identify both felt

and unfelt needs to learn how consumer preference products and brand and stores ,what

their attitude before and after promotional components and how and why make their

consumer decisions. Many of these applications of consumer research are managerial in

perspective. They are designed to help a market make specific marketing decisions

concerning products , price promotion and distribution

Consumer research provides basis for the development of new

product and service concepts to meet targeted consumer needs . It also enables marketer

to build consumer meaning into the product or service by discovering which attributes

are most Important to the target market and integrating them into the product or service

design

HOW TO THE CONSUMER HELPS MANUFACTRER:

The consumption helps the manufacturer by formulating the policy

of manufacturers according to the demand and assists then in securing the markets of

their goods. The consumer also reveals the manufacturers from the necessity of having

sales organization of their own.

The manufacturers are not put to that task of collection and security

orders and the numbers of accounts they have to open are smaller than when dealing

with the consumer.

The consumers are in a position to advice the manufacturers as to the changes or

Alternation or alternatives , which should be introduced in their products .

While manufacturing soft drinks the company should maintain both quality

and quantity occupies a very important stabilized position. The company can assess the

public demand and see that marketable goods are manufactured thus protecting the

manufacturer from wasteful and indiscriminate production as well as the consumer

against goods which are neither satisfactory nor good value.

CONSUMER RELATIONS:
The consumer decisions making with a brief consideration of relation

marketing firm have established relationship marketing programs to faster usage

loyalty and a commitment to their company’s products and services . In this way

relationship marketing is aimed at creating strong relationships with a core group of

consumers. The emphasis is on developing long term bonds with them and by giving

them some kind of personal connections to the business.

Ultimately it is an advantage to develop long term relationship with

existing consumers because it is easier and less expensive to make an additional sale to

an existing consumer then to make an additional sale to an existing consumer than to

make a new sale to a new consumer.

However the effort involved for the firm is developing and

maintaining a consumer’s relationship must be weighted against the expected long term

benefits. Markets much determine the life time value of a consumers to ensure that the

cost of obtaining servicing and communicating with the consumers do not exceed the

potential profits
CONSUMER PREFERENCE:

Preference is a function of the difference between perceived performance and

expectations. Companies seeking to win in today’s markets must track their consumers

expectations perceived company’s performance and consumer preference.

While assisting the satisfaction level a company must not conclude that it can

get a full picture of consumer satisfaction and dissatisfaction by simply running a

complaint and suggestion system.

Some times consumers may feel that their complain are minor or that

they will be made to feel bad or that no remedy will be offered . the result is that the

company has needlessly lost consumers

Therefore the company instead of using complains level as a measure

of consumer’s preference obtaining a direct measure of consumer satisfaction by

conducting periodic surveys would provide more appropriate measure . thus

questionnaire can be made to random sample of their recent consumers to find out how

they feel about various aspects of the companies performance . they can also solicit

buyers views on the competitors performance

So the respondents can be asked a list of problems they hear, had

with the offer and list out improvements needed. Companies could also ask to the

respondents to rate various elements of the offers in terms of the importance of each

element and how will the company performance each element. So the researcher has

taken up a comprehensive study on the consumer preference of coco cola products

 Let reason go before every enterprise,
And counsel before every action

Research is a human activity based on intellectual investigation and is aimed at

discovering, interpreting, and revising human knowledge on different aspects of the
world.

MARKETING RESEARCH

Marketing research is the function that links the consumer, customer and public to the
marketer through information used to identify and define marketing opportunities and
problems; generate, refine, and evaluate marketing actions; monitor marketing
performance; and improve understanding of marketing as a process. Marketing research
specifies the information required to address these issues, designs the methods for
collecting information, manages and implements the data collection process, analyses
and communicates the findings and their implications.

-American Marketing Association

Marketing research is about researching the whole company’s marketing process.

-Palmer (2000)

Market research (also in some contexts known as industrial research) is any

organized effort to gather infomarketing research is concerned specifically about
marketing processes, while market research is concerned specifically with markets.
Market research is one of the key factors used in maintaining competitiveness over
competitors. Market research provides important information to identify and analyze the
market need, market size and competition. Market-research techniques encompass both
qualitative techniques such as focus groups, in-depth interviews, and ethnography, as
well as quantitative techniques such as customer surveys, and analysis of secondary
data.

Market research, which includes social and opinion research, is the systematic gathering
and interpretation of information about individuals or organizations using statistical and
analytical methods and techniques of the applied social sciences to gain insight or
support decision making.

Market research started to be conceptualized and put into formal practice during the
1920s, as an offshoot of the advertising boom of the Golden Age of radio in the United
States. Advertisers began to realize the significance of demographics revealed by
sponsorship of different radio programs.

Market research is a way of getting an overview of consumers' wants, needs and beliefs.
It can also involve discovering how they act. The research can be used to determine how
a product could be marketed. Peter Drucker believed[4] market research to be the
quintessence of marketing. Market research is a way that producers and the marketplace
study the consumer and gather information about the consumers needs. There are two
major types of market research. Primary Research sub-divided into Quantitative and
Qualitative research and Secondary research.

Factors that can be investigated through market research include:

Market information

Through market information one can know the prices of different commodities in the
market, as well as the supply and demand situation. Market researchers have a wider
role than previously recognized by helping their clients to understand social, technical,
and even legal aspects of markets.

Market segmentation

Market segmentation is the division of the market or population into subgroups with
similar motivations. It is widely used for segmenting on geographic differences,
demographic differences (age, gender, ethnicity, etc.), technographic differences,
psychographic differences, and differences in product use. For B2B segmentation firm
graphics is commonly used.
Market trends

Market trends are the upward or downward movement of a market, during a period of
time. Determining the market size may be more difficult if one is starting with a new
innovation. In this case, you will have to derive the figures from the number of potential
customers, or customer segments.

SWOT analysis

SWOT is a written analysis of the Strengths, Weaknesses, Opportunities and Threats to

a business entity. A SWOT may also be written up for the competition to understand
how to develop the marketing and product mixes.

Another factor that can be measured is marketing effectiveness. This includes:

 Customer analysis (Segmentation of target customers)

 Choice modelling
 Competitor analysis
 Risk analysis
 Product research
 Advertisement research
 Marketing mix modelling
 Simulated Test Marketing

Market research for the film industry

It is important to test marketing material for films to see how an audience will receive it.
There are several market research practices that may be used:

1. concept testing, which evaluates reactions to a film idea and is fairly rare;
2. positioning studios, which analyse a script for marketing opportunities;
3. focus groups, which probe viewers' opinions about a film in small groups prior
to release;
4. test screenings, which involve the previewing of films prior to theatrical release;
5. tracking studies, which gauge (often by telephone polling) an audience's
awareness of a film on a weekly basis prior to and during theatrical release;
6. advertising testing, which measures responses to marketing materials such as
trailers and television advertisements;
7. exit surveys, that measure audience reactions after seeing the film in the cinema.
Influence from the Internet

The availability of research by way of the Internet has influenced a vast number of
consumers using this media; for gaining knowledge relating to virtually every type of
available product and service. It has been added to by the growth factor of emerging
global markets, such as China, Indonesia and Russia, which is significantly exceeding
that of the established and more advanced B2B e-commerce markets. Various statistics
show that the increasing demands of consumers are reflected not only in the wide and
varied range of general Internet researching applications, but in online shopping
research penetration.

This is stimulated by product-enhancing websites, graphics, and content designed to

attract casual "surfing" shoppers, researching for their particular needs, competitive
prices and quality. According to the Small Business Administration (SBA), a successful
business is significantly contributed to by gaining knowledge about customers,
competitors, and the associated industry. Market research creates not only this
understanding, but is the process of data analysis regarding which products and services
are in demand.

The convenience and easy accessibility of the Internet has created a global B2C E-
commerce research facility, for a vast online shopping network that has motivated retail
markets in developed countries. In 2010, between $400 billion and $600 billion in
revenue was generated by this medium also, it is anticipated that in 2015, this online
market will generate revenue between $700 billion and $950 billion.

Beyond online web-based market research activities, the Internet has also influenced
high-street modes of data collection by, for example, replacing the traditional paper
clipboard with online survey providers. Over the last 5 years, mobile surveys have
become increasingly popular. Mobile has opened the door to innovative new methods of
engaging respondents, such as social voting communities.

Research and social media applications

The UK Market Research Society (MRS) reports research has shown that on average,
the three social media platforms primarily used by Millennials are LinkedIn, Facebook
and YouTube. Social Media applications, according to T-Systems, help generate the
B2B E-commerce market and develop electronic business process efficiency. This
application is a highly effective vehicle for market research, which combined with E-
commerce, is now regarded as a separate, extremely profitable field of global business.
While many B2B business models are being updated, the various advantages and
benefits offered by Social Media platforms are being integrated within them.

Business intelligence organization have compiled a comprehensive report related to

global online retail sales, defining continued growth patterns and trends in the industry.
Headed "Global B2C E-Commerce and Online Payment Market 2014" the report
perceives a decrease in overall growth rates in North America and Western Europe,
asthe expected growth in the online market sales, is absorbed into the emerging markets.
It is forecast that the Asia-Pacific region will see the fastest growth in the B2C E-
Commerce market and replace North America as the B2C E-Commerce sales region
leader, within a few years. This effectively, offers a significant, motivational platform
for new Internet services, to promote user market research-friendly applications.

Research and market sectors

The primary online sale providers in B2C E-Commerce, worldwide, includes the USA
based Amazon.com Inc. which remains the E-Commerce revenues, global leader. The
growth leaders in the world top ten are two online companies from China, both of which
conducted Initial Public Offering (IPO) this year; Alibaba Group Holding Ltd. and JD
Inc. Another company from the top ten is Cnova N.V., a recently formed E-Commerce
subsidiary of the French Group Casino, with various store retailers developing and
expanding their E-Commerce facilities worldwide. It is a further indication of how
consumers are increasingly being attracted to the opportunities of online researching
and expanding their awareness of what is available to them.

Service providers; for example those related to finance, foreign market trade and
investment promote a variety of information and research opportunities to online users.
In addition, they provide comprehensive and competitive strategies with market
research tools, designed to promote worldwide business opportunities for entrepreneurs
and established providers. General access, to accurate and supported market research
facilities, is a critical aspect of business development and success today. The Marketing
Research Association was founded in 1957 and is recognized as one of the leading and
prominent associations in the opinion and marketing research profession. It serves the
purpose of providing insights and intelligence that helps businesses make decisions
regarding the provision of products and services to consumers and industries.

This organization knowledge of market conditions and competition is gained by

researching relevant sectors, which provide advantages for entry into new and
established industries. It enables effective strategies to be implemented; the assessment
of global environments in the service sectors, as well as foreign market trade and
investment barriers! Research, is utilized for promoting export opportunities and inward
investment, helping determine how to execute competitive strategies, focus on objective
policies and strengthen global opportunities. It is a medium that influences,
administrates and enforces agreements, preferences, leveling trading environments and
competitiveness in the international marketplace.

The retail industry aspect of online market research, is being transformed worldwide by
M-Commerce with its mobile audience, rapidly increasing as the volume and varieties
of products purchased on the mobile medium, increases. Researches conducted in the
markets of North America and Europe, revealed that the M-Commerce penetration on
the total online retail trade, had attained 10%, or more. It was also shown that in
emerging markets, smart-phone and tablet penetration is fast increasing and contributing
significantly to online shopping growth.
Market research consists of systematically gathering data about people or companies – a
market – and then analyzing it to better understand what that group of people needs. The
results of market research, which are usually summarized in a report, are then used to
help business owners make more informed decisions about the company’s strategies,
operations, and potential customer base.

Understanding industry shifts, changing consumer needs and preferences, and

legislative trends, among other things, can shape where a business chooses to focus its
efforts and resources. That’s the value of market research.

Meaning, if your research told you that scientists had recently created a new kind of
fabric that helped the wearer lose weight just by putting it on, for example, your retail
clothing store might want to adjust its buying plan to test designs using this new fabric.
Or if you uncovered that shoppers in your area rely heavily on coupons in making a
purchase decision, you might decide to test sending your mailing list a promotional
coupon.

Market research can help businesses run more efficiently and market more effectively.

Types of Market Research

While there are a number of market research tools you can use, there are really only two
types of market research data:

 Primary. Primary data is first-hand information you gather yourself, or with

the help of a market research firm. You control it.
 Secondary. Secondary data is pre-existing public information, such as the data
shared in magazines and newspapers, government or industry reports. You can
analyze the data in new ways, but the information is available to a large number
of people.

Using primary or secondary data, there are two types of research studies:

 Exploratory. Exploratory market research gathers lots of open-ended data

from many people to better understand a problem or opportunity. The goal is to
gather perceptions and opinions regarding an issue, so your company can decide
how to address it. But first you have to understand how your market sees the
issue.
 Specific. Once you understand the larger market issues, or opportunities, you
can use specific questions to gather information that could lead to a new product
or service. Market research firms often use specific questions to gather feedback
on a new advertising campaign, or to refine a planned new product.
Primary Market Research Tools

While primary research is more time-consuming and expensive, sometimes it’s the only
way to get the information you need. The most common primary research tools are:

 Surveys. Asking customers a series of questions to better understand how they

feel about a product’s features, or about the experience they had during their
hotel stay, for example, are two possible uses of a survey. Surveys consist of a
list of questions that can be shared with an individual by phone, in person, on a
card or paper, or online using a survey software.
 Focus groups. Bringing together groups of people with a common
characteristic, such as age, hobby, or buying habits, to better understanding their
likes and dislikes is a focus group. Focus groups typically consist of 8-12 people
with a moderator who poses questions for the group to discuss. They are a useful
way of getting feedback on a new product, new features, or new ad campaign.
 Observation. When the researcher gathers information simply by watching
how a subject interacts with a product, the technique is observation. This is often
used in comparing preferences for several types of products.
 In-depth interviews. Another market research technique is the one-on-one
interview with an individual, during which probing questions are posed to better
understand that person’s product preferences.

Sources of Secondary Data

When conducting market research to better understand industry trends and broader
shifts, secondary research is often a good place to start. Some of the most useful sources
include:

 Industry associations and trade groups – most associations publish annual

outlooks
 Trade journals specific to your industry
 Government reports - such as the Census or annual federal procurement results
 Industry analysts – these individuals monitor the performance of public
companies in your space
 University faculty members – see what research reports they may have
published
 Websites – while Wikipedia isn’t a reliable source, there may be others that lead
you to reputable sources and reports
  Competitor websites and materials – to convince potential customers to buy
from them, they may share useful statistics and reports.

INTRODUCTION TO COCA-COLA

Coca-Cola, the product that has given the world its best-known taste was born in
Atlanta, Georgia, on May 8, 1886. Coca-Cola Company is the world’s leading
manufacturer, marketer and distributor of non-alcoholic beverage concentrates and
syrups, used to produce nearly 400 beverage brands. It sells beverage concentrates and
syrups to bottling and canning operators, distributors, fountain retailers and fountain
wholesalers. The Company’s beverage products comprises of bottled and canned soft
drinks as well as concentrates, syrups and not-ready-to-drink powder products. In
addition to this, it also produces and markets sports drinks, tea and coffee. The Coca-
Cola Company began building its global network in the 1920s. Now operating in more
than 200 countries and producing nearly 400 brands, the Coca-Cola system has
successfully applied a simple formula on a global scale: “Provide a moment of
refreshment for a small amount of money- a billion times a day.”

The Coca-Cola Company and its network of bottlers comprise the most sophisticated
and pervasive production and distribution system in the world. More than anything, that
system is dedicated to people working long and hard to sell the products manufactured
by the Company. This unique worldwide system has made The Coca-Cola Company the
world’s premier soft-drink enterprise. From Boston to Beijing, from Montreal to
Moscow, Coca-Cola, more than any other consumer product, has brought pleasure to
thirsty consumers around the globe. For more than 115 years, Coca-Cola has created a
special moment of pleasure for hundreds of millions of people every day.
The Company aims at increasing shareowner value over time. It accomplishes this by
working with its business partners to deliver satisfaction and value to consumers
through a worldwide system of superior brands and services, thus increasing brand
equity on a global basis. They aim at managing their business well with people who are
strongly committed to the Company values and culture and providing an appropriately
controlled environment, to meet business goals and objectives. The associates of this
Company jointly take responsibility to ensure compliance with the framework of
policies and protect the Company’s assets and resources whilst limiting business risks.
 UNIT- 2.1
INDUSTRY PROFILE
INDUSTRY PROFILE

A BRIEF INSIGHT - THE FMCG INDUSTRY IN INDIA

Fast Moving Consumer Goods (FMCG), also known as Consumer Packaged Goods
(CPG) is products that have a quick turnover and relatively low cost. Consumers
generally put less thought into the purchase of FMCG than they do for other products.

The Indian FMCG industry witnessed significant changes through the 1990s. Many
players had been facing severe problems on account of increased competition from
small and regional players and from slow growth across its various product categories.
As a result, most of the companies were forced to revamp their product, marketing,
distribution and customer service strategies to strengthen their position in the market.

By the turn of the 20th century, the face of the Indian FMCG industry had changed
significantly. With the liberalization and growth of the Indian economy, the Indian
customer witnessed an increasing exposure to new domestic and foreign products
through different media, such as television and the Internet. Apart from this, social
changes such as increase in the number of nuclear families and the growing number of
working couples resulting in increased spending power also contributed to the increase
in the Indian consumers' personal consumption.

The realization of the customer's growing awareness and the need to meet changing
requirements and preferences on account of changing lifestyles required the FMCG
producing companies to formulate customer-centric strategies. These changes had a
positive impact, leading to the rapid growth in the FMCG industry. Increased
availability of retail space, rapid urbanization, and qualified manpower also boosted the
growth of the organized retailing sector.

HLL led the way in revolutionizing the product, market, distribution and service formats of the
FMCG industry by focusing on rural markets, direct distribution, creating new product,
distribution and service formats. The FMCG sector also received a boost by government led
initiatives in the 2003 budget such as the setting up of excise free zones in various parts of the
country that witnessed firms moving away from outsourcing to manufacturing by investing in
the zones.

Though the absolute profit made on FMCG products is relatively small, they generally
sell in large numbers and so the cumulative profit on such products can be large. Unlike
some industries, such as automobiles, computers, and airlines, FMCG does not suffer
from mass layoffs every time the economy starts to dip. A person may put off buying a
car but he will not put off having his dinner.

Unlike other economy sectors, FMCG share float in a steady manner irrespective of
global market dip, because they generally satisfy rather fundamental, as opposed to
luxurious needs. The FMCG sector, which is growing at the rate of 9% is the fourth
largest sector in the Indian Economy and is worth Rs.93000 cr. The main contributor,
making up 32% of the sector, is the South Indian region. It is predicted that in the year
2010, the FMCG sector will be worth Rs.143000 cr. The sector being one of the biggest
sectors of the Indian Economy provides up to 4 million jobs.
A BRIEF INSIGHT - BEVERAGE INDUSTRY IN INDIA

In India, beverages form an important part of the lives of people. It is an industry, in

which the players constantly innovate, in order to come up with better products to gain
more consumers and satisfy the existing consumers.

BEVERAGES

NON-
ALCOHOLIC
ALCOHOLIC

NON-
CARBONATED
CARBONATED

COLA NON-COLA NON-COLA

Fig 2.0 BEVERAGES IN INDIA

The beverage industry is vast and there various ways of segmenting it, so as to cater
the right product to the right person. The different ways of segmenting it are as
follows:

 Alcoholic, non-alcoholic and sports beverages.

 Natural and Synthetic beverages.
 In-home consumption and out of home on premises consumption.
 Age wise segmentation i.e. beverages for kids, for adults and for senior
citizens.
 Segmentation based on the amount of consumption i.e. high levels of
consumption and low levels of consumption.
If the behavioural patterns of consumers in India are closely noticed, it could be
observed that consumers perceive beverages in two different ways i.e. beverages are a
luxury and that beverages have to be consumed occasionally. These two perceptions
are the biggest challenges faced by the beverage industry. In order to leverage the
beverage industry, it is important to address this issue so as to encourage regular
consumption as well as and to make the industry more affordable.
Four strong strategic elements to increase consumption of the products of the beverage
industry in India are:

 The quality and the consistency of beverages needs to be enhanced so

that consumers are satisfied and they enjoy consuming beverages.
 The credibility and trust needs to be built so that there is a very strong
and safe feeling that the consumers have while consuming the beverages.
 Consumer education is a must to bring out benefits of beverage
consumption whether in terms of health, taste, relaxation, stimulation,
refreshment, well-being or prestige relevant to the category.
 Communication should be relevant and trendy so that consumers are
able to find an appeal to go out, purchase and consume.
 The beverage market has still to achieve greater penetration and also a
wider spread of distribution. It is important to look at the entire beverage
market, as a big opportunity, for brand and sales growth in turn to add up to the
overall growth of the food and beverage industry in the economy.
 UNIT – 2.2
COMPANY PROFILE
COMPANY PROFILE

MISSION:

Our Roadmap starts with our mission, which is enduring. It declares our purpose as a
company and serves as the standard against which we weigh our actions and decisions.
 To refresh the world...
 To inspire moments of optimism and happiness...
 To create value and make a difference.

VISION:

Our vision serves as the framework for our Roadmap and guides every aspect of our
business by describing what we need to accomplish in order to continue achieving
sustainable, quality growth.

 People: Be a great place to work where people are inspired to be the best
they can be.
 Portfolio: Bring to the world a portfolio of quality beverage brands that
anticipate and satisfy people's desires and needs.
 Partners: Nurture a winning network of customers and suppliers, together
we create mutual, enduring value.
 Planet: Be a responsible citizen that makes a difference by helping build
and support sustainable communities.
 Profit: Maximize long-term return to shareowners while being mindful of
our overall responsibilities.
  Productivity: Be a highly effective, lean and fast-moving organization.

WINNING CULTURE

Our Winning Culture defines the attitudes and behaviours that will be required of us to
make our 2020 Vision a reality.

LIVEOUR VALUES
Our values serve as a compass for our actions and describe how we behave in the world.
 Leadership: The courage to shape a better future.
 Collaboration: Leverage collective genius.
 Integrity: Be real.
 Accountability: If it is to be, it's up to me.
 Passion: Committed in heart and mind.
 Diversity: As inclusive as our brands.
 Quality: What we do, we do well.

FOCUS ON THE MARKET

 Focus on needs of our consumers, customers and franchise partners.
 Get out into the market and listen, observe and learn.
 Possess a world view.
 Focus on execution in the marketplace every day.
 Be insatiably curious.

WORK SMART
 Act with urgency.
 Remain responsive to change.
 Have the courage to change course when needed.
 Remain constructively discontent.
 Work efficiently.
HISTORY OF COCA-COLA

The prototype Coca-Cola recipe was formulated at the Eagle Drug and Chemical
Company, a drugstore in Columbus, Georgia by John Pemberton, originally as a coca
wine called Pemberton's French Wine Coca. He may have been inspired by the
formidable success of Vin Mariani, a European cocawine.

In 1886, when Atlanta and Fulton County passed prohibition legislation, Pemberton
responded by developing Coca-Cola, essentially a non-alcoholic version of French
Wine Coca. The first sales were at Jacob's Pharmacy in Atlanta, Georgia, on May 8,
1886. It was initially sold as a patent medicine for five cents a glass at soda fountains,
which were popular in the United States at the time due to the belief that carbonated
water was good for the health.[9] Pemberton claimed Coca-Cola cured many diseases,
including morphine addiction, dyspepsia, neurasthenia, headache, and impotence.
Pemberton ran the first advertisement for the beverage on May 29 of the same year in
the Atlanta Journal.

By 1888, three versions of Coca-Cola — sold by three separate businesses — were on

the market. Asa Griggs Candler acquired a stake in Pemberton's company in 1887 and
incorporated it as the Coca Cola Company in 1888. The same year, while suffering from
an on-going addiction to morphine, Pemberton sold the rights a second time to four
more businessmen: J.C. Mayfield, A.O. Murphey, C.O. Mullahy and E.H. Bloodworth.
Meanwhile, Pemberton's alcoholic son Charley Pemberton began selling his own
version of the product.

John Pemberton declared that the name "Coca-Cola" belonged to Charley, but the other
two manufacturers could continue to use the formula. So, in the summer of 1888,
Candler sold his beverage under the names Yum Yum and Koke. After both failed to
catch on, Candler set out to establish a legal claim to Coca-Cola in late 1888, in order to
force his two competitors out of the business. Candler purchased exclusive rights to the
formula from John Pemberton, Margaret Dozier and Woolfolk Walker. However, in
1914, Dozier came forward to claim her signature on the bill of sale had been forged,
and subsequent analysis has indicated John Pemberton's signature was most likely a
forgery as well.
In 1892 Candler incorporated a second company, The Coca-Cola Company (the current
corporation), and in 1910 Candler had the earliest records of the company burned,
further obscuring its legal origins. By the time of its 50th anniversary, the drink had
reached the status of a national icon in the USA. In 1935, it was certified kosher by
Rabbi Tobias Geffen, after the company made minor changes in the sourcing of some
ingredients.

Coca-Cola was sold in bottles for the first time on March 12, 1894. The first outdoor
wall advertisement was painted in the same year as well in Cartersville, Georgia. Cans
of Coke first appeared in 1955. The first bottling of Coca-Cola occurred in Vicksburg,
Mississippi, at the Biedenharn Candy Company in 1891. Its proprietor was Joseph A.
Biedenharn. The original bottles were Biedenharn bottles, very different from the much
later hobble-skirt design that is now so familiar. Asa Candler was tentative about
bottling the drink, but two entrepreneurs from Chattanooga, Tennessee, Benjamin F.
Thomas and Joseph B. Whitehead, proposed the idea and were so persuasive that
Candler signed a contract giving them control of the procedure for only one dollar.
Candler never collected his dollar, but in 1899 Chattanooga became the site of the first
Coca-Cola bottling company. The loosely termed contract proved to be problematic for
the company for decades to come. Legal matters were not helped by the decision of the
bottlers to subcontract to other companies, effectively becoming parent bottlers. Coke
concentrate, or Coke syrup, was and is sold separately at pharmacies in small quantities,
as an over-the-counter remedy for nausea or mildly upset stomach.

On April 23, 1985, Coca-Cola, amid much publicity, attempted to change the formula of
the drink with "New Coke". Follow-up taste tests revealed that most consumers
preferred the taste of New Coke to both Coke and Pepsi, but Coca-Cola management
was unprepared for the public's nostalgia for the old drink, leading to a backlash. The
company gave in to protests and returned to a variation of the old formula, under the
name Coca-Cola Classic on July 10, 1985.

On February 7, 2005, the Coca-Cola Company announced that in the second quarter of
2005 they planned to launch a Diet Coke product sweetened with the artificial
sweetenersucralose, the same sweetener currently used in Pepsi One. On March 21,
2005, it announced another diet product, Coca-Cola Zero, sweetened partly with a blend
of aspartame and acesulfame potassium. In 2007, Coca-Cola began to sell a new
"healthy soda": Diet Coke with vitamins B6, B12, magnesium, niacin, and zinc, marketed
as "Diet Coke Plus”. On July 5, 2005, it was revealed that Coca-Cola would resume
operations in Iraq for the first time since the Arab League boycotted the company in
1968.

In April 2007, in Canada, the name "Coca-Cola Classic" was changed back to "Coca-
Cola." The word "Classic" was truncated because "New Coke" was no longer in
production, eliminating the need to differentiate between the two. The formula remained
unchanged.

In January 2009, Coca-Cola stopped printing the word "Classic" on the labels of 16-
ounce bottles sold in parts of the south eastern United States. The change is part of a
larger strategy to rejuvenate the product's image. In November 2009, due to a dispute
over wholesale prices of Coca-Cola products, Costco stopped restocking its shelves
with Coke and Diet Coke.
GLOBAL MARKET SHARE OF COCA-COLA

In 2009, the company generated revenues of $31 billion with $6.8 billion net income.
An increased consumer preference for healthier drinks has resulted in slowing growth
rates for sales of carbonated soft drinks (abbreviated as CSD), which constitutes 78% of
KO’s sales. KO’s profits are also vulnerable to the volatile costs for the raw materials
used to make drinks - such as the corn syrup used as a sweetener, the aluminium used in
cans, and the plastic used in bottles. Furthermore, slowing consumer spending in Coke's
large North American market compounds the challenge of increasing costs and a weak
economic environment. Finally, Coca-Cola earns approximately 75% of revenue from
international sales, exposing it to currency fluctuations, which are particularly adverse
with a stronger U.S. Dollar (USD).

Despite these challenges, Coca-Cola has remained profitable. Though the non-CSD
market is growing quickly, the traditional CSD market is still large in terms of both
revenues and volume and highly lucrative. The size and variety of KO’s offerings in the
CSD category, coupled with the unparalleled brand equity of the Coca-Cola trademark,
has allowed KO to maintain its share of this important market. KO has also responded
to consumers’ changing tastes with new, non-CSD product launches and acquisitions
such as that of Glace au in 2007. Strong international growth has also more than offset a
weak domestic market.
On February 25, Coca-Cola Company announced its plan to buy Coca-Cola Enterprises
(CCE) for $12.3 million.[7] Since spinning of Coca-Cola Enterprises (CCE) 24 years
ago, the soft drink market has changed dramatically with consumers buying fewer soft
drinks and more non-carbonated beverages, such as Powerade and Dasani water. Under
the new deal, Coca-Cola Company will take control of the bottler's North America
operations, giving the company control over 90% of the total North America volume. In
return, Coca-Cola Enterprises will take over Coke's bottling operations in Norway and
Sweden, becoming a European-focused producer and distributor.
In March 2010, Coca-Cola Company entered into discussions to buy the Russian juice
company, OAO Nidan Juices. The company is 75% owned by a private equity firm in
London and 25% by its Russian founders and controls 14.5% of the Russian juice
market. If successful, the purchase would add to Coca-Cola's 20.5% market share,
passing Pepsi's 30% market share. The Russian juice market is estimated to be $3.2
billion dollars, and estimates of Nidan's purchase price are between $560-$620 million.
In April 2010, Coca-Cola Company purchased a majority share of Innocent, the British
fruit smoothie maker. Last year the company bought an 18% share of the company for
more than $45 million, and recent purchases of additional shares increased Coke's stake
to 58%.
In June 2010, Coca-Cola Company agreed to pay Dr Pepper Snapple Group (DPS) $715
million for the continued right to sell their products following the company's acquisition
of Coca-Cola Enterprises (CCE). The deal covers the next 20 years with an option to
renew for an additional 20 years.

TRENDS AND FORCES

 The Global Economic Recession Threatens Overall

Demand:

In 2008 and 2009, the global economy has fallen into a recession. Not just the United
States but countries from all over the world have felt the impacts of the 2008 Financial
Crisis. This may be a problem for Coke, which derives approximately 75% of its sales
from outside North America. Still, the company has positioned itself well in
international markets both organically and through acquisitions, such as that of Chinese
juice maker Huiyuan for $2.4 billion. However the company was unsuccessful with its
purchase of Huiyuan as it broke antitrust laws in China. On March 5, 2010, Coke's CEO
said that emerging markets are bouncing back quicker than more developed markets.

 New Aversion To Soda Threatens Main Business:

74% of the Coca Cola Company's products are classified as carbonated soft drinks,
making it particularly sensitive to changes in demand for CSD. Consumer demand for
CSD has been negatively affected by concerns about health and wellness. This is true
across most of KO's markets. There has been an increase in the number of regulations
regarding CSD in the United States in response to the heightened desire for healthy food
consumption.

In 2006, many state public school systems banned the sale of soft drinks on their
campuses. The Centre for Science and Public Interest proposed that a warning label be
placed on all beverages containing more than 13g of sugar per 12-oz serving. This
proposal would affect all non-diet, full calorie drinks produced by KO. These factors
have driven a shift in consumption away from CSD to healthier alternatives, such as tea,
juices, and water.

Within the CSD segment consumers have been moving away from sugared drinks,
opting instead for diet beverages, which do not generally contain any sugar or calories.

Though KO has been somewhat slow to respond to this shift in consumer preferences, it
has recently begun to increase its development of both diet CSD and non-CSD
beverages. KO is faced with the task of balancing the risk of new innovations with the
low growth rates of established brands, a predicament for manufactures throughout the
beverage industry.

 Integrated Bottler Strategy Increases Flexibility:

After CEO Neville Isdell was brought out of retirement in 2004 to revive the then
flagging beverage maker, one of the first areas that he targeted for improvement was
KO's frayed relations with its extensive network of bottlers. Since consolidating all
company-owned bottlers into the Bottling Investments division, Isdell has continued to
increase KO's interest in its bottlers through stake purchases or outright buyouts. This
strategy represents a weakening of the division between KO's production and
distribution operations. Isdell believes that by combining production and distribution
operations the company will have enhanced its ability to quickly respond to changing
market conditions. In KO's 2007 Q3 Analyst call, Isdell credited the outright purchase
of Coca-Cola Bottlers Philippines (CCBPI) for double-digit volume growth in that
country. Additionally, KO has signed new agreements with many of its bottlers which
allow them to distribute drinks produced by other companies. For example, Coca-Cola
Enterprises (CCE) now distributes Arizona, a ready-to-drink tea made by Ferolito,
Vultaggio& Sons, and an American iced-tea company. Isdell sees these agreements as
another way of taking advantage of the rapidly growing non-CSD market.

 Bottled Water Falling Out Of Favour:

In 03 2009, Dasani bottled water's revenues fell by double digits; this decrease is
emblematic of the bottled water industry as a whole. In August 2009, the Wall Street
Journal reported that sales of bottled water had fallen for the first time in five years.

The combination of the recession and upper class consumers' increased environmental
consciousnesshas lead many customers to cut back on bottled water in favour of tap
water and reusable containers.

Following this trend, at least one town in Washington state and one in Australia have
outlawed the selling of bottled water within their city limits. In 2008, bottled water was
the third most popular beverage (behind soda and milk), but compared to 2007,
Americans consumption declined for the first time, down to 8.7 billion gallons from 8.8
billion gallons. Although this is a seemingly small decrease, industry experts don't
expect bottled water to bounce back anytime soon.

 Dollar Affects International Performance:

Another trend affecting Coca-Cola is the relative strength of the U.S. Dollar (USD).
Although the company is based in the US, KO derives about 75% of its operating
income from outside United States. Because of this, the company is very sensitive to the
strength of the dollar. As foreign currencies weaken relative to the dollar, goods sold in
foreign markets are suddenly worth fewer dollars back in the US, lowering earnings.
Thus, if the dollar strengthens (as it did in the second half of 2008 and 2009), it has a
negative effect on KO's earnings. Coca-Cola executives expect currency fluctuations to
adversely affect 3Q09 operating income by 10-12% and 4Q09 operating income by high
single digits.

KO has broad exposure to foreign currencies and actively hedges a large portion of
these to avoid wide swings in earnings from currency fluctuations. Although this
hedging insulates from the potential downside of a strengthening dollar, it also limits
larger gains from drastic downswings in the dollar's value.

 Commodity Cost Fluctuations Affect Margins:

The Coca-Cola Company’s profitability can be affected both directly and indirectly by
the costs of various production inputs. KO itself is responsible for purchasing the raw
materials used to make its concentrates and syrups. Variations in the prices for these
goods can affect the company’s total cost of production as well as its profit margins.
Changes in the production costs of bottlers can also impact KO’s profitability, though in
a more indirect way. If the raw materials necessary for bottling become more expensive,
the bottler may be forced to drastically raise prices to compensate.

Such a price increase would likely hurt KO, given the competitive nature of the non-
alcoholic beverage industry, and provide a possible incentive for consumers to switch to
other companies’ beverages.

Aluminium, corn, and PET resin are three examples of such production goods used by
bottlers that could have significant bearing on the Coca-Cola Company’s profit margins.
In 2007, the prices of these commodities rose drastically with general commodities
bubble and dramatically pressured margins. They receded in 2008, but the possibility of
another significant rise in Commodities represents a constant threat to profits.

Poter’s Five Forces

  Rivalry Among Existing Firms:
The greatest competition that Coca-Cola faces is from the rival sellers within the
industry. Coca-Cola, Pepsi Co, and Cadbury Schweppes are among the largest
competitors in this industry, and they are all globally established which creates a great
amount of competition. Aside from these major players, smaller companies such as Cott
Corporation and National Beverage Company make up the remaining market share. All
five of these companies make a portion of their profits outside of the United States.

Though Coca-Cola owns four of the top five soft drink brands (Coca-Cola, Diet Coke,
Fanta, and Sprite), it had lower sales in 2005 than did PepsiCo (Murray, 2006c).
However, Coca-Cola has higher sales in the global market than PepsiCo, PepsiCo is the
main competitor for Coca-Cola and these two brands have been in a power struggle for
years (Murray, 2006c). Coke has been more dominant with a 53% of market share as in
1999 compared to Pepsi with a market share of 21%.

According to Beverage Digest's 2008 report on carbonated soft drinks, PepsiCo's U.S.
market share has increased to 30.8%, while the Coca-Cola Company's has decreased to
42.7% due to Pepsi marketing schemes still the higher large gap between the market
share can be attributed to the fact that Coca-Cola took advantage of Pepsi entering the
market late and has set up its bottler's and distribution network especially in developed
markets.

"The Coca-Cola Company" is the largest soft drink company in the world. Every year
800,000,000 servings of just "Coca-Cola" are sold in the United States alone. Bottling
plants with some exceptions are locally owned and operated by independent business
people who are native to the nations in which they are located. Coca-Cola manufactures,
distributes and markets non-alcoholic beverage concentrates and syrups, including
fountain syrups.

It supplies concentrates and beverage bases used to make the products and provides
management assistance to help it's bottler's ensure the profitable growth of their
business. This has put Pepsi at a significant disadvantage compared to US market.
Overall, Coca-Cola continues to outsell Pepsi in almost all areas of the world. However,
exceptions include India, Saudi Arabia and Pakistan.

By most accounts, Coca-Cola was India's leading soft drink until 1977 when it left India
after a new government ordered, The Coca-Cola Company to turn over its secret
formula for Coke and dilute its stake in its Indian unit as required by the Foreign
Exchange Regulation Act (FERA).

In 1988, PepsiCo gained entry to India by creating a joint venture with the Punjab
government-owned Punjab Agro Industrial Corporation (PAIC) and Voltas India
Limited. This joint venture marketed and sold Lehar Pepsi until 1991 when the use of
foreign brands was allowed. PepsiCo bought out its partners and ended the joint venture
in 1994. In 1993, The Coca-Cola Company returned in pursuance of India's
Liberalization policy. In 2005, The Coca-Cola Company and PepsiCo together held
95% market share of soft-drink sales in India. Coca-Cola India's market share was
52.5%.

In Russia, Pepsi initially had a larger market share than Coke but it was undercut once
the Cold War ended. In 1972, Pepsi Co Company struck a barter agreement with the
government of the Soviet Union, in which Pepsi Co was granted exportation and
Western marketing rights to Stolichnaya vodka in exchange for importation and Soviet
marketing of Pepsi-Cola.

This exchange led to Pepsi-Cola being the first foreign product sanctioned for sale in
the U.S.S.R. Pepsi, as one of the first American products in the Soviet Union, became a
symbol of that relationship and the Soviet policy.

Brand name loyalty is another competitive pressure. The Brand Keys Customer Loyalty
Leaders Survey (2004) shows the brands with the greatest customer loyalty in all
industries. Diet Pepsi ranked 17th and Diet Coke ranked 36th as having the most loyal
customers to their brands. The new competition between rival sellers is to create new
varieties of soft drinks, such as vanilla and cherry, in order to increase sales and getting
new customers.

Pepsi is however trying to counter this by competing more aggressively in the emerging
economies where the dominance of Coke is not as pronounced, with the growth in
emerging markets significantly expected to exceed the developed markets, rivalry in
international market is going to be more pronounced.

Pepsi advertisements often focused on celebrities, choosing Pepsi over Coke, supporting
Pepsi's positioning as "The Choice of a New Generation." In 1975, Pepsi began showing
people doing blind taste tests called Pepsi Challenge in which they preferred one
product over the other. Pepsi started hiring more popular spokespersons to promote their
products.

In the late 1990s, Pepsi launched its most successful long-term strategy of the Cola
Wars, Pepsi Stuff. Consumers were invited to "Drink Pepsi, Get Stuff" and collect Pepsi
Points on billions of packages and cups. They could redeem the points for free Pepsi
lifestyle merchandise. After researching and testing the program for over two years to
ensure that it resonated with consumers, Pepsi launched Pepsi Stuff, which was an
instant success.

Tens of millions consumers participated. Pepsi outperformed Coke during the summer
of the Atlanta Olympics, held at Coke's hometown where Coke was the lead sponsor for
the Games. Due to its success, the program was expanded to include Mountain Dew
into Pepsi's international markets worldwide. The company continued to run the
program for many years, continually innovating with new features each year.

Coca-Cola and Pepsi engaged in a "cyber-war" with the re-introduction of Pepsi Stuff in
2005 & Coca-Cola retaliated with Coke Rewards. This cola war has now concluded,
with Pepsi Stuff ending its services and Coke Rewards still offering prizes on their
website. Both were loyalty programs that give away prizes and product to consumers
after collecting bottle caps and 12 or 24 pack box tops, then submitting codes online for
a certain number of points. However, Pepsi's online partnership with Amazon allowed
consumers to buy various products with their "Pepsi Points", such as mp3 downloads.
Both Coca-Cola and coke previously had a partnership with the iTunes Store.

 Potential Entrants:

New entrants are not a strong competitive pressure for the soft drink industry. Coca-
Cola and Pepsi Co dominate the industry with their strong brand name and great
distribution channels. In addition, the soft-drink industry is fully saturated and growth is
small. This makes it very difficult for new, unknown entrants to start competing against
the existing firms.

Another barrier to entry is the high fixed costs for warehouses, trucks, and labour, and
economies of scale. New entrants cannot compete in price without economies of scale.
These high capital requirements and market saturation make it extremely difficult for
companies to enter the soft drink industry therefore new entrants are not a strong
competitive force.
Capital requirements for producing, promoting, and establishing a new soft drink
traditionally have been viewed as extremely high. According to industry experts, this
makes the likelihood of potential entry by new players quite low, except perhaps in
much localized situations that matter little to Coke or Pepsi. Yet, while this view may
reflect conventional wisdom, some industry observers question whether a new time is
coming, with 'new age' beverages selling to well-informed and health-informed and
health-conscious consumers. This issue was beginning to grab the attention of both
Coke and Pepsi in the summer of 1992, when they both were not able to explain a drop
in their June 1992 sales.

 Substitutes:

Numerous beverages are available as substitutes for soft drinks. Citrus beverages and
fruit juices are the more popular substitutes. Availability of shelf space in retail stores as
well as advertising and promotion traditionally has had a significant effect on beverage
purchasing behaviour. Overall total liquid consumption in the United States in 1991
included Coca-Cola's 10% share of all liquid consumption.

“For years the story in the non-alcoholic sector centred on the power struggle between
Coke and Pepsi. But as the pop fight has topped out, the industry's giants have begun
relying on new product flavours and looking to noncarbonated beverages for growth.”

Substitute products are those competitors that are not in the soft drink industry. Such
substitutes for Coca-Cola products are bottled water, sports drinks, coffee, and tea,
juices etc.
Bottled water and sports drinks are increasingly popular with the trend to be a more
health conscious consumer. There are progressively more varieties in the water and
sports drinks that appeal to different consumer's tastes, but also appear healthier than
soft drinks.

In addition, coffee and tea are competitive substitutes because they provide caffeine.
The consumers who purchase a lot of soft drinks may substitute coffee if they want to
keep the caffeine and lose the sugar and carbonation.

Blended coffees are also becoming popular with the increasing number of Starbucks,
Barista and CCD stores that offer many different flavours to appeal to all consumer
markets. It is also cheap for consumers to switch to these substitutes making the threat
of substitute products very strong (Datamonitor, 2005).

The growth rate has been recently criticized due to the market saturation of soft drinks.
Datamonitor (2005) stated, “Looking ahead, despite solid growth in consumption, the
global soft drinks market is expected to slightly decelerate, reflecting stagnation of
market prices.” The change attributed to the other growing sectors of the non-alcoholic
industry including tea & coffee is 11.8% and bottled water is 9.3%. Sports drinks and
energy drinks are also expected to increase in growth as competitors start adopting new
product lines.

Profitability in the soft drink industry will remain rather solid, but market saturation has
caused analysts to suspect a slight deceleration of growth in the industry (2005).
Because of this, soft drink leaders are establishing themselves in alternative markets
such as the snack, confections, bottled water, and sports drinks industries.

In order for soft drink companies to continue to grow and increase profits they will need
to diversify their product offerings. So in order to compete with the substitutes industry,
coca-cola has diversified from just carbonated drink industry to other substitute and so
have other brands like Pepsi, Dr pepper/Snapple.

 Bargaining Power Of Buyers:

Individual consumers are the ultimate buyers of soft drinks. However, Coke and Pepsi's
real 'buyers' have been local bottlers who are franchised -or are owned, especially in
the case of Coke- to bottle the companies' products and to whom each company sells its
patented syrups or concentrates. While Coke and Pepsi issue their franchise, these
bottlers are in effect the 'conduit' through which these international cola brands get to
local consumers
Through the early 1980's, Coke's domestic bottlers were typically independent family
businesses deriving from franchises issued early in the century. Pepsi had a collection
of similar franchises, plus a few large franchisees that owned many locations. Until
1980, Coke and Pepsi were somewhat restricted in owning bottling facilities, which
was viewed as a restraint of free trade. Jimmy Carter, a Coke fan, changed that by
signing legislation to allow soft-drink companies to own bottling companies or
territories, plus upholding the territorial integrity of soft-drink franchises, shortly
before he left office.
Also, the three most important channels for soft drinks are supermarkets, fountain
sales, and vending. In 1987, supermarkets accounted for about 40% of total U.S. soft
drink industry sales, fountain sales represented about 25%, and vending accounted for
approximately 13%. Other retailers represent the remaining percentage.
 While both Coca-Cola and Pepsi distribute their bottled soft drinks through a network
of bottling companies, Coca-Cola uses its own network of wholesalers for their
fountain syrup distribution, and Pepsi distributes its fountain syrup through its bottlers.

 Bargaining Power Suppliers:

The principal raw material used by the soft-drink industry in the United States is high
fructose corn syrup, a form of sugar, which is available from numerous domestic
sources. The principal raw material used by the soft-drink industry outside the United
States is sucrose. It likewise is available from numerous sources.
Another raw material increasingly used by the soft-drink industry is aspartame, a
sweetening agent used in low-calorie soft-drink products. Until January 1993,
aspartame was available from just one source -the NutraSweet Company, a subsidiary
of the Monsanto Company- in the United States due to its patent, which expired at the
end of 1992.
Coke managers have long held 'power' over sugar suppliers. They view the recently
expired aspartame patents as only enhancing their power relative to suppliers.

PESTEL ANALYSIS OF COCA- COLA

PESTLE stands for Political, Economic, Social, Technological, Legal and

Environmental. It is a tool that helps the organisations for making strategies and to
know the EXTERNAL environment in which the organisation is working and is going
to work in the future.
Coca-Cola beverage, which is the leading manufacturer and distributor of non-alcoholic
drinks also need to undergo this PESTLE analysis to know about the external
environment (especially their competitors and the opportunities available) in order to
keep pace with the fast growing economy.

Political Analysis:

Political factors are how far a government intervenes in the operations of the company.
The political factors may include tax policy, trade restrictions, environmental policy,
laws imposed on the recruiting labours, amount of permitted goods by the government
and the service provided by the government.
Globally, Coca-Cola beverages being a non-alcoholic industry falls under the FDA
(Food and Drug Administration) , it is an agency in the United States Department of
Health and Human Services. Its headquarters is in USA and it has started opening
offices in foreign countries as well. The job of the FDA is to check and certify whether
the ingredients used in the manufacturing of Coca-Cola products in the particular
country is meeting to the standards or not. In Coca-Cola the company takes all the
necessary steps to analyse thoroughly before introducing any ingredients in its products
and get prior approval from the FDA. The company also has to take into consideration
of the regulation imposed by FDA on plastic bottled products.
Apart from FDA the other political factors includes tax policies and accounting
standards. The accounting standards used by the company changes from time to time
which have a significant role in the reported results.
The company also is subjected to income tax policies according to the jurisdiction of
various countries. In addition to this, the company is also subjected to import and excise
duties for distribution of the products in the countries where it does not have the
outsourcing units.
Moreover, if there is any unrest or changes in the government and any kind of protest by
the political activists may decline the demand for the products. Also the situations like
the unsure conditions prevailing in Iraq and escalation of the terrorist activities in these
areas could affect the international market of our product. It creates an inability for the
company to penetrate in the markets of such countries.

Economic Factors:

The economic factors analyse the potential areas where the firm can grow and expand.
It includes the economic growth of the country, interest rates, exchange rates, inflation
rates, wage rates and unemployment in the country.
The company first analyses the economic condition of the country before venturing into
that country. When there is an economic growth in the country, the purchasing power
among people increases. It gives the company or the marketer a good chance to market
the product. Coca-Cola, in the past identified this correctly and rightly started its
distribution across various countries. The net operating profits for the company outside
US stands at around 72%. Along with this the company uses 63 various types of
currencies other than US Dollar. Hence there is a definite impact in the revenues due to
the fluctuating foreign currency exchange rates. A strong and weak currency tends to
affect the exporting of the products globally.
Interest rates are the rate which is imposed on the company for the money they have
borrowed from government. When there is an increase in the interest rates, it may deter
the company in further investment as the cost for borrowing is higher. Coca-Cola uses
derivative financial instruments to cope up with the fluctuating interest rates. Inflation
and wage rate go hand in hand, when there is an increase in the inflation the employee
demand for a higher wage rate to cope up with the cost of living.
This comes as additional cost for the company which cannot be reflected in the price of
the final product as the competition and risk in this segment is higher. This is a threat in
the external environment faced by the company. From the above explanation it is clearly
seen that the economic factors involves a major impact in the behaviour of the company
during various economic situations.

Social Factors:

Social factors are mainly the culture aspects and attitude, health consciousness among
people, population growth with age distribution, emphasis on safety. The company
cannot change the social factors but the company has to adjust itself to the changing
society. The company adapts various management strategies to adapt to these social
trends.
Coca-Cola which is a B2C company, is directly related to the customer, so social
changes are the most important factors to consider. Each and every country has a unique
culture and attitude among the people. It is very important to know about the culture
before marketing in a particular country. Coca-Cola has about 3300+ products in their
stable, when entering into a country it does not introduce all the products. It introduces
minimum number of products according to the culture of the country and the attitude of
the people.
Consumers and government are becoming increasingly aware of the public health
consequences, mainly obesity which is the second social factor in the soft drinks
industry. It inspired the company to venture into the areas of Diet coke and zero calorie
soft drinks. The problem of obesity is taken seriously among the youngsters who like to
maintain a good physique. Hence coke introduced dietary products for those youngsters
who can enjoy coke with zero calories. In one of the study it is said that “Consumer
from the age groups 37 to 55 are also increasingly concerned with nutrition”. Since
many are aware, they are concerned with the longevity of their lives. This will affect the
demand of the company in the existing product and also is an opportunity to venture
into new health and energy drinks industry.
Population growth rate and the age distribution is another social factor to be considered.
It is very important because non-alcoholic markets have most of its share from the
children and youngsters. Adults used to celebrate mostly with alcohol. The age
distribution of the country becomes important for the success of the product in a
country.

Technological Factors:

Technology plays a varied role in the soft drinks industry. The manufacturing and
distribution of the products is relatively a Low-Tech business, although the creation of a
new product with the perfect blend and taste is a science (an art in itself).
Technological contributions are most important in packaging. The company rely on
their bottling partners for a significant portion of their business. Nearly 83% of the
worldwide unit case volume is manufactured and distributed by their bottling partners in
whom the company does not have controlling power. Hence it is necessary for the
company to maintain a cordial relation with their bottling partners. If the company do
not give ample support in pricing, marketing and advertising then the bottling industry
while increase their short term profits, may become detrimental to the company.
The advancement in technology in the company has led to: Introduction of new ways
for the availability of Coca-Cola, it introduced general vending machines all over the
world. In products it led to the development of new products like Cherry Coke, Diet
Coke etc. The technical advancement in the bottling industries include, introduction of
recyclable and non-refillable bottles, introduction of cans which are trendy, stylish and
popular among the youngsters.

Legal Factors:

The legal factors include discrimination law, customer law, antitrust law, employment
law and health and safety law. In Coca-Cola the business is subjected to various laws
and regulation in the numerous countries in which they do the business, the laws include
competition, product safety, advertising and labelling, container deposits, environment
protection, labour practices.
In the US the products of the company is subjected to various acts like Federal Food,
Drug and Cosmetic Act, the Federal Trade Commission Act, Occupation Safety and
Health Act, various environment related acts and regulations, the production,
distribution, sale and advertising of all the products are subjected to various laws and
regulations. Changes in these laws could result in increased costs and capital
expenditures, which affects the company profitability and also the production and
distribution of the products.
Various jurisdictions may adopt significant regulations in the additional product
labelling and warning of certain chemical content or perceived health consequences.
These requirements if become applicable in the future the company must be ready to
accept and have necessary changes in hand for the same.

Environment Factors:

These factors include the environment such as the weather conditions and the seasons in
which people prefer to buy cool beverages. Also the company must follow the
environmental issues related to the product manufacturing, packaging and distributing
in various countries. It must adhere to the norms and market the product accordingly.
Usage of renewable plastic in the PET bottles is followed by the company strictly.

SWOT ANALYSIS OF COCA-COLA

 STRENGTHES WEAKNESS
Negative Publicity.
World's leading brand.
Decline in cash from
Large scale of operations.
Operating Activities.
Robust revenue growth in 3
Sluggish Performance in
segments.
North America.
SWOT
ANALYSI
S
OPPORTUNITIES THREATS
Acquisitions. Intense Competition.
Growing bottled water Dependence on bottling
market. Patners.
Growing Hispanic Sluggish growth of
Population in U.S. Carbonated beverages.

Fig 2.1 SWOT ANALYSIS OF COCA-COLA

STRENGTHES:

 World’s Leading Brand

Coca-Cola has strong brand recognition across the globe. The company has a leading
brand
value and a strong brand portfolio. Business-Week and Inter-brand, a branding
consultancy,
recognize. Coca-Cola as one of the leading brands in their top 100 global brands
ranking in
2006.The Business Week-Inter-brand valued Coca-Cola at $67,000 million in 2006.
Coca-Cola ranks well ahead of its close competitor Pepsi which has a ranking of 22
having a brand value of $12,690 million Furthermore; Coca-Cola owns a large portfolio
of product brands. The company owns four of the top five soft drink brands in the
world: Coca-Cola, Diet Coke, Sprite and Fanta.

Strong brands allow the company to introduce brand extensions such as Vanilla Coke,
Cherry
Coke and Coke with Lemon. Over the years, the company has made large investments
in brand promotions. Consequently, Coca-Cola is one of the best recognized global
brands. The
company’s strong brand value facilitates customer recall and allows Coca-Cola to
penetrate new markets and consolidate existing ones.

 Large Scale Of Operations

With revenues in excess of $24 billion Coca-Cola has a large scale of operation. Coca-
Cola is the largest manufacturer, distributor and marketer of non-alcoholic beverage
concentrates and syrups in the world. Coco-Cola is selling trademarked beverage
products since the year 1886 in the US. The company currently sells its products in
more than 200 countries. Of the approximately 52 billion beverage servings of all types
consumed worldwide every day, beverages bearing trademarks owned by or licensed to
Coca-Cola account for more than 1.4 billion.

The company’s operations are supported by a strong infrastructure across the world.
Coca-Cola owns and operates 32 principal beverage concentrates and/or syrup
manufacturing plants located throughout the world.

In addition, it owns or has interest in 37 operations with 95 principal beverage bottling

and canning plants located outside the US. The company also owns bottled water
production and still beverage facilities as well as a facility that manufactures juice
concentrates. The company’s large scale of operation allows it to feed upcoming
markets with relative ease and enhances its revenue generation capacity.
  Robust Revenue Growth In 3 Segments

Coca-Cola’s revenues recorded a double digit growth, in three operating segments.

These three segments are Latin America, ‘East, South Asia, and Pacific Rim’ and
Bottling investments. Revenues from Latin America grew by 20.4% during fiscal 2006,
over 2005. During the same period, revenues from ‘East, South Asia, and Pacific Rim’
grew by 10.6% while revenues from the bottling investments segment by 19.9%.

Together, the three segments of “Latin America”, “East, South Asia” and “Pacific Rim”
bottling investments, accounted for 34.8% of total revenues during fiscal 2006. Robust
revenues growth rates in these segments contributed to top-line growth for Coca-Cola
during 2006.

WEAKNESS:

 Negative Publicity

The Coca-Cola Company has been involved in a number of controversies and lawsuits
related to its relationship with human rights violations and other perceived unethical
practices. There have been continuing criticisms regarding the Coca-Cola Company's
relation to the Middle East and U.S. foreign policy. The company received negative
publicity in India during September 2006.The company was accused by the Centre for
Science and Environment (CSE) of selling products containing pesticide residues. Coca-
Cola products sold in and around the Indian national capital region contained a
hazardous pesticide residue.

On 10 December 2008, the US Food and Drug Administration (FDA) wrote to Mr.
Muhtar Kent, President and Chief Executive Officer, to warn him that the FDA had
concluded that Coca-Cola's product Diet Coke Plus 20 FL OZ was is in violation of the
Federal Food, Drug, and Cosmetic Act.

In January 2009, the US consumer group the Centre for Science in the Public Interest
filed a class-action lawsuit against Coca-Cola. The lawsuit was in regards to claims
made, along with the company's flavours, of Vitamin Water. Claims say that the
33 grams of sugar are more harmful than the vitamins and other additives are helpful.
  Sluggish Performance In North America

Coca-Cola’s performance in North America was far from robust. North America is
Coca-Cola’s core market generating about 30% of total revenues during fiscal 2006.
Therefore, a strong performance in North America is important for the company.

In North America the sale of unit cases did not record any growth. Unit case retail
volume in North America decreased 1% primarily due to weak sparkling beverage
trends in the second half of 2006 and decline in the warehouse-delivered water and juice
businesses. Moreover, the company also expects performance in North America to be
weak during 2007. Sluggish performance in North America could impact the company’s
future growth prospects and prevent Coca-Cola from recording a more robust top-line
growth.

 Decline In Cash From Operating Activities

The company’s cash flow from operating activities declined during fiscal 2006. Cash
flows from operating activities decreased 7% in 2006 compared to 2005. Net cash
provided by operating activities reached $5,957 million in 2006, from $6,423 million in
2005. Coca-Cola’s cash flows from operating activities in 2006 also decreased
compared with 2005 as a result of a contribution of approximately $216 million to a tax-
qualified trust to fund retiree medical benefits.

The decrease was also the result of certain marketing accruals recorded in 2005.Decline
in cash from operating activities reduces availability of funds for the company’s
investing and financing activities, which, in turn, increases the company’s exposure to
debt markets and fluctuating interest rates.

OPPORTUNITIES:
  Acquisitions

During 2006, its acquisitions included Kerry Beverages, (KBL), which was
subsequently, reappointed Coca-Cola China Industries (CCCIL). Coca-Cola acquired a
controlling shareholding in KBL, its bottling joint venture with the Kerry Group, in
Hong Kong.
The acquisition extended Coca-Cola’s control over manufacturing and distribution joint
ventures in nine Chinese provinces.

In Germany the company acquired Apollinaris which sells sparkling and still mineral
water. Coca-Cola has also acquired a 100% interest in TJC Holdings, a bottling
company in South

Africa. Coca-Cola also made acquisitions in Australia and New Zealand during 2006.
These acquisitions strengthened Coca-Cola’s international operations.

These also give Coca- Cola an opportunity for growth, through new product launch or
greater penetration of existing markets. Stronger international operations increase the
company’s capacity to penetrate international markets and also gives it an opportunity
to diversity its revenue stream. On 25 February 2010, Coco cola confirms to acquire the
Coca cola enterprises (CCE) one the biggest bottler in North America. This strategy of
coca cola strengthens its operations internationally.

 Growing Bottled Water Market

Bottled water is one of the fastest-growing segments in the world’s food and beverage
market owing to increasing health concerns. The market for bottled water in the US
generated revenues of about $15.6 billion in 2006.

Market consumption volumes were estimated to be 30 billion litres in 2006. The

market's consumption volume is expected to rise to 38.6 billion units by the end of
2010. This represents a CAGR of 6.9% during 2005-2010.

In terms of value, the bottled water market is forecast to reach $19.3 billion by the end
of 2010. In the bottled water market, the revenue of flavoured water (water-based,
slightly sweetened refreshment drink) segment is growing by about $10 billion
annually. The company’s Dasani brand water is the third best-selling bottled water in
the US. Coca-Cola could leverage its strong position in the bottled water segment to
take advantage of growing demand for flavoured water.

 Growing Hispanic Population In U.S

Hispanics are growing rapidly both in number and economic power. As a result, they
have become more important to marketers than ever before. In 2006, about 11.6 million
US households were estimated to be Hispanic. This translates into a Hispanic
population of about 42 million.

The US Census estimates that by 2020, the Hispanic population will reach 60 million or
almost 18% of the total US population. The economic influence of Hispanics is growing
even faster than their population. Nielsen Media Research estimates that the buying
power of Hispanics will exceed $1 trillion by 2008- a 55% increase over 2003 levels.

Coca-Cola has extensive operations and an extensive product portfolio in the US. The
company can benefit from an expanding Hispanic population in the US, which would
translate into higher consumption of Coca-Cola products and higher revenues for the
company.

THREATS:

 Intense Competition

Coca-Cola competes in the non-alcoholic beverages segment of the commercial

beverages industry. The company faces intense competition in various markets from
regional as well as global players. Also, the company faces competition from various
non-alcoholic sparkling beverages including juices and nectars and fruit drinks. In many
of the countries in which Coca-Cola operates, including the US, PepsiCo is one of the
company’s primary competitors.

Other significant competitors include Nestle, Cadbury Schweppes, Groupe DANONE

and Kraft Foods.

Competitive factors impacting the company’s business include pricing, advertising,

sales promotion programs, product innovation, and brand and trademark development
and protection. Intense competition could impact Coca-Cola’s market share and revenue
growth rates.

 Dependence On Bottling Partners

Coca-Cola generates most of its revenues by selling concentrates and syrups to bottlers
in whom it doesn’t have any ownership interest or in which it has no controlling
ownership interest. In 2006, approximately 83% of its worldwide unit case volumes
were produced and distributed by bottling partners in which the company did not have
any controlling interests. As independent companies, its bottling partners, some of
whom are publicly traded companies, make their own business decisions that may not
always be in line with the company’s interests. In addition, many of its bottling partners
have the right to manufacture or distribute their own products or certain products of
other beverage companies.

If Coca-Cola is unable to provide an appropriate mix of incentives to its bottling

partners, then the partners may take actions that, while maximizing their own short-term
profits, may be detrimental to Coca-Cola. These bottlers may devote more resources to
business opportunities or products other than those beneficial for Coca-Cola. Such
actions could, in the long run, have an adverse effect on Coca-Cola’s profitability.

In addition, loss of one or more of its major customers by any one of its major bottling
partners could indirectly affect Coca-Cola’s business results. Such dependence on third
parties is a weak link in Coca-Cola’s operations and increases the company’s business
risks.

 Sliggish Growth Of Carbonated Beverages

US consumers have started to look for greater variety in their drinks and are becoming
increasingly health conscious. This has led to a decrease in the consumption of
carbonated and other sweetened beverages in the US. The US carbonated soft drinks
market generated total revenues of $63.9 billion in 2005, this representing a compound
annual growth rate (CAGR) of only 0.2% for the five-year period spanning 2001-2005.
The performance of the market is forecast to decelerate, with an anticipated compound
annual rate of change (CAGR) of -0.3% for the five-year period 2005-2010 expected to
drive the market to a value of $62.9 billion by the end of 2010.
Moreover in the recent years, beverage companies such as Coca-Cola have been
criticized for selling carbonated beverages with high amounts of sugar and unacceptable
levels of dangerous chemical content, and have been implicated for facilitating poor diet
and increasing childhood obesity. Moreover, the US is the company’s core market.
Coca-Cola already expects its performance in the region to be sluggish during 2007.
Coca-Cola’s revenues could be adversely affected by a slowdown in the US carbonated
beverage market.

Coca-Cola India was the leading soft drink brand in India till 1977 when it was forced
to close down its operation by a socialist government in the drive for self-sufficiency.
After 16 years of absence, coca cola returned to India and witnessed a different culture
and economic platform. During their absence, Parle brothers introduced a new type of
cola called THUMS UP. Along with, they also formulated a lemon flavoured drink,
LIMCA, and mango flavoured, MAAZA. In 1993, coca cola bought the whole Parle
Brother operation, in a hope to beat the main competitor (Pepsi). They presumed that
with the tried and tested products of Parle they will be able to regain their throne in the
Indian soft drink market. Pepsi having a 6 year head start helped revive the demand for
global cola but it was not easy for the soft drink giant (coca cola) to return to India.
Pepsi put more focus on the youth of the country in their advertisements but coca cola
tried influencing Indians with the ‘American’ way of life, which turned out to be a
mistake.

Coca-Cola invested heavily in India for the first five years, which got them credit of
being one of the biggest investor in the country; however, their sales figures were not so
impressive. Hence, they had to re-think their market strategies. Coca-Cola learned from
Hindustan Lever that reducing their will result in more turnover, hence leading to profit.
They launched an extensive market research in India. They ascertained that in India 3
As must be applied; Affordability, Availability and Acceptability. Coca-Cola learnt that
they were competing with local drinks such as “NimbuPani”, “Narial Pani”, “Lassi” etc.
and reached to a conclusion that competitive pricing was unavoidable. Since then they
introduced a 200 ml glass bottle for Rs.5.

Further, they had different advertising campaigns for different regions of the country. In
the southern part, their strategy was to make Bollywood or Tamil stars to endorse their
products. In various regions they tried portraying coca cola products with different
regional food products. One of the most famous ad campaigns in India was ‘Thanda
Matlab Coca-Cola’; they featured the same quote with different regional entities.

Presently, Coca-Cola is the biggest brand in soft drinks and is way ahead in market
share i.e. 60% in Carbonated Soft drinks Segment, 36% in Fruit drinks Segment, 33% in
Packaged water Segment, compared to its arch rival, Pepsi. Diversifying their product
range and having a competitive pricing policy, they have regained their throne.With
virtually all the goods and services required to produce and market Coca-Cola being
made in India, the business system of the Company directly employs approximately
6,000 people, and indirectly creates employment for more than 125,000 people in
related industries through its vast procurement, supply, and distribution System.
The Indian operations comprises of 50 bottling operations, 25 owned by the Company,
with another 25 being owned by franchisees. That apart, a network of 21 contract
packers manufactures a range of products for the Company.

On the distribution front, 10-tonne trucks – open bay three-wheelers that can navigate
the narrow alleyways of Indian cities – constantly keep our brands available in every
nook and corner of the Country’s remotest areas.

PRODUCTS OF COCA-COLA INDIA

COCA-COLA:-

In India Coca-Cola was leading soft drink till 1977 when Government policies
necessitated its departure. Coca-Cola made its return to the country in 1993 and made
significant investments to ensure that the beverage is available to more and more
people, even in remote and inaccessible parts of the nation.
Over the past fourteen years has enthralled consumers in India by connecting with
passions of India – Cricket, movies, music & food. Coca-Cola’s advertising campaigns
“Jo Chaho Ho Jaye” & “Life Ho TohAise” were very popular & had entered youths
vocabulary. In 2002.Coca-Cola launched its iconic campaign “Thanda Matlab Coca-
Cola” which sky rocketed the brand to make it India’s favourite soft drink brand.

GLASS PET CAN FOUNTAIN

200ml, 300ml, 500ml, 500ml, 1.5L, 2L, 330 ml VARIOUS SIZES
1000ml 2.25L, 500ml, 100ml

Table - 1.0

LIMCA:-

Limca was introduced in 1971 in India. Limca has remained unchallenged as the No.1
sparkling drink in the cloudy lemon segment. The success formula is the sharp fizz and
lemoni bite combined with the single minded proposition of the brand as the provider of
“Freshness”.

Limca can cast a tangy refreshing spell on anyone, anywhere. Derived from “Nimbu” +
“Jaise” hence Lime Sa, Limca has lived up to its promises of refreshment and has been
the original thirst choice of millions of customers for over 3 decades.

GLASS PET CAN FOUNTAIN

200ml, 300ml, 500ml, 1.5L, 2L, 330 ml VARIOUS SIZES
500ml, 1000ml 2.25L, 500ml, 100ml

Table - 1.1
 THUMS UP:-

Thums up is a leading sparkling soft drink and most trusted brand in India. Originally
introduced in 1977, Thums up was acquires by The Coca-Cola Company in 1993.
Thums up is known for its strong, fizzy taste and it confident, mature and uniquely
masculine attitude. This brand clearly seeks to separate the men from the boys.

GLASS PET CAN FOUNTAIN

200ml, 300ml, 500ml, 1.5L, 2L, 330 ml VARIOUS SIZES
500ml, 1000ml 2.25L, 500ml,
100ml

Table - 1.2

SPRITE:-

Sprite a global leader in the lemon lime category is the second largest sparkling
beverage brand in India. Launched in 1999, Sprite with its cut-thru perspective has
managed to be a true teen icon.
RGB PET CAN FOUNTAIN
 200ml, 300ml 500ml, 600ml, 330 ml VARIOUS SIZES
1250ml, 1500ml,
2000ml, 2250ml

Table – 1.3

FANTA:-

Fanta entered the Indian market in the year 1993. Over the years Fanta has occupied a
strong market place and is identifies as “The Fun Catalyst”. Perceived as a fun youth
brand, Fanta stands for its vibrant colour, tempting taste and tingling bubbles that not
just uplifts feelings but also helps free spirit thus encouraging one to indulge in the
moment. This positive imagery is associated with happy, cheerful and special times
with friends.

GLASS PET CAN FOUNTAIN

200ml, 300ml 500ml, 1.5L, 2L, 330 ml VARIOUS SIZES
2.25L, 500ml, 100ml

Table – 1.4

MINUTE MAID PULPY ORANGE:-

The history of the Minute Maid brand goes as far back as 1945 when the Florida Food
Corporation developed orange juice powder. The company developed a process that
eliminated 80% of the water in the orange juice, forming a frozen concentrate that when
reconstitute created orange juice. They branded it Minute Maid a name connoting the
convenience and the ease of preparation. Minute Maid thus moved from a powdered
concentrate to the first ever orange juice from concentrate.
The launch of Minute Maid in India (started with the south of the country) is aimed to
further extend the leadership of Coca-Cola in India in the juice drink category.

Available in 3 PET pack sizes i.e. 400ml, 1 litre, 1.25 litres.

MAAZA:-

Maaza was introduced in late 1970’s. Maaza has today come to symbolise the very
spirit of mangoes. Universally loved for its taste, colour, thickness and wholesome
properties, Maaza is the mango lover’s first choice.

RGB PET POCKET MAAZA

200ml, 250ml 250ml, 600ml, 1.2L 200ml

Table – 1.5

KINLEY:-

The importance of water can never be understated, Particularly in a nation such as India
where water governs the lives of the millions, be it as a part of everyday ritual or as the
monsoon which gives life to the sub continent. Kinley water comes with the assurance
of safety from the Coca-Cola Company.

Available in PET 500ml and 1000ml.

 GEORGIA GOLD COFFEE:-

Georgia coffee was introduced in India in 2004. The Georgia gold range of Tea and
coffee beverages is the perfect solution for office and restaurant needs. Today Georgia
coffee is available at Quick-Service Restaurants, Airports, Cinemas and in Corporates
across all major metros in India.

HOT BEVERAGES Espresso, Americano, Cappuccino, Caffe Latte,

Mochaccino, Hot Chocolate, Cardamon Tea.
COLD BEVERAGES Ice Teas, Cold Coffee.

Table – 1.6

MARKETING MIX OF COCA-COLA INDIA

 Product:-

Coca-Cola India has a wide range of products in its product line i.e. Coca-Cola, Fanta,
Sprite, Thums Up, Maaza, Minute Maid and Georgia Gold. Bottled water was another
area where Coca-Cola identified major opportunities. In 2002, Packaged drinking water
in India was an Rs 1,000 cr industry and growing by 40% every year. PDW was a low
margin – high volume business, but it was an attractive proposition for bottlers as it
increased plant utilization rates. In this market Coke’s Kinley was pitched against
Ramesh Chauhan’s Bisleri and Pepsi’s Aquafina. The product not only faced intense
competition but also was difficult to differentiate. Coke positioned Kinley as natural
water with the tag line “BhoondBhoond Mein Vishwas” (Trust in each drop of water).

In early 1999, the parent company acquired Cadbury Schweppes. As a result 12 more
bottlers were brought into CCI’s fold. This acquisition added Crush, Canada Dry and
Sport Cola to CCI’s product line. This meant CCI had three orange, clear lime and cola
drinks each in its portfolio.

 Price:-

Coke learnt with experience that price was a strategic weapon in an emerging market
like India. An increase in value added tax in 1996 had taken the price of the 300ml
bottle beyond the reach of many Indian customers. In 2000, CCI conducted a yearlong
experiment in coastal Andhra Pradesh by introducing a 200ml bottle at Rs 7. The
volumes went up by 30% demonstrating the importance of consumer affordability. So
the 200ml pack priced at Rs 5 was rolled out countrywide in January 2003. The
advertising Campaign highlighted the affordability and Indian image.

To make it affordable, Coke introduced Kinley in 200ml pouches for Re. 1 in selected
places in Ahmadabad and 200ml water cups in Maharashtra, priced at Rs 3 per cup in
testing marketing exercise conducted in mid – 2002. In 2002 Kinley with 35% market
share had become the leader in the retail PDW segment and was contributing 20% of
CCI’s revenues.
 Place:-

Coke pushed down responsibilities from corporate headquarters to the local business
units. The aim was to effectively align CCI's corporate resources, support systems and
culture to leverage the local capabilities. CCI's operations had been divided into North,
Central and Southern regions. Each region had a president at the top, with divisions
comprising marketing, finance, human resources and bottling operations. The heads of
the divisions reported to the CEO. Bottling operations were divided into four companies
directed by the bottling head from headquarters. Under the new plan, CCI shifted to a
six region profit center set up where product customization and packaging, marketing
and brand building were taken up locally. A Regional General Manager (RGM) headed
each region with the regional functional heads reporting to him. All the RGMs reported
to VP (Operations, who in turn reported to CEO. The four bottling operations, with 37
bottling plants, were merged into Hindustan Coca-Cola Beverages (HCCB). Each of the
six regions had on an average six bottling plants. Each plant was headed by an Area
General Manager (AGM) and held profit center responsibility for a business territory.
He reported to the RGM as well as the head of bottling at the headquarters.

 Promotion:-

In the initial years, CCI focused on establishing the Coca-Cola brand quickly. The
marketing campaign positioned Coca-Cola as an international brand and did not
emphasize local association. Coke, as a deliberate strategy, decided not to spend heavily
on promoting Thums Up. Indeed the marketing spend on Thums Up between 1993 and
1996 was almost negligible. The overall marketing effort was also not focused as CCI
changed the head of marketing three times during the period. Thumps Up remained
neglected. Inadequate marketing support for other Parle brands also led to their
declining market shares.

The bottlers taken over by Coke also had problems adjusting to a new work culture.
They argued that CCI's lack of interest in promoting Thumps Up was resulting in falling
sales and asked CCI to take corrective action.

Coke is primarily targeted at young individuals over the age of twenty-five. This can be
seen by Coca-Colas advertising campaigns, which are aimed towards the young, by
featuring well known personalities popular to this age group. During 90'ies Coke's
promotion efforts did not seem to be effective. They were focused on mega events like
the 1996 Cricket World Cup held in India. CCI's World Cup Cricket campaign was
overshadowed by Pepsi's "Nothing official about it" campaign. Major analysts were
surprised that Thumps Up was totally out of the picture during such a mega event. In
1998 localization of marketing efforts, CCI signed up celebrities like Aamir Khan,
Aishwarya Rai, and Sunil Gavaskar to promote Coke. Coke also began efforts to
rejuvenate the Parle brands, Limca and Thumps Up. In 1998, India was declared the
fastest growing market within the Coca-Cola system. But things were far from normal.
Attempts at building growth through discounts and PET take home segment were not
very successful because of lack of coordination between the launches and marketing
back-up.

To maintain good relationships with bottlers and avoid defections to the other camp,
dealers had been pampered by offering expensive overseas trips. In 2000, Coke wrote
off investments in India, amounting to $400 Mn. The revised value of CCI's assets after
the charge was $300 mn.

CCI spent $3.5 mn to beef up advertising and distribution for Thumps Up. By 2002, it
had become India's No.2 cola drink after Pepsi. Maaza, the mango drink, was
repositioned as a juice brand and saw a growth of almost 30% in 2001. Since India was
a large country of different tastes and cultures, CCI customized its marketing strategy
for different regions. It promoted the Coke brand in Delhi, Thumps Up in Mumbai and
Andhra Pradesh, and Fanta in Tamil Nadu. Coke had plans to launch Rimzim, a spicy
soda drink in North Maharashtra.

PESTEL ANALYSIS OF COCA-COLA INDIA

PESTLE stands for Political, Economic, Social, Technological, Legal and

Environmental. It is a tool that helps the organisations for making strategies and to
know the EXTERNAL environment in which the organisation is working and is going
to work in the future.

POLITICAL FACTORS:
  Historical

Coca Cola India was the leading soft drink brand in India till 1977 when it left rather
than revealing its formula to the government. They re-entered the country in 1993.
However, the primary barrier for Coca-Cola’s entry into the Indian market was its
political environment. Despite the liberalization of the Indian economy in 1991 and
introduction of the New Industrial Policy to eliminate barriers such as bureaucracy and
regulation, there was still a lot of protectionism. India’s past promotion of “Indigenous
availability” or “Swadeshi movement” depicted its affinity for local products. Due to
India’s suspicion of foreign business entering Indian markets, Coca Cola received alien
status its re-entry. This and some of the policies imposed on foreign enterprises proved
as a hindrance to the growth of the company in the country. To make things worse, the
policies were neither clear nor unchanging.
For example, foreign businesses were not allowed to market their products under the
same name if selling within the Indian market. Thus, Coca Cola had to be changed to
Coca Cola India (and Pepsi had to be renamed to Lehar Pepsi). However, the most
controversial, and by far, the most damaging was when Coca-Cola was forced to sign an
agreement to sell 49% of its equity in order to buy out Indian bottlers. Due to the lack of
consistency in the legal aspects, more importance was being given to lobbying the
politicians.

 Recent Scenario

During recent times, Coca Cola India has faced its fair share of problems. On August 5th
2003, The Centre for Science and Environment (CSE), an activist group in India
focused on environmental sustainability issues (specifically the effects of
industrialization and economic growth) issued a press release stating: "12 major cold
drink brands sold in and around Delhi contain a deadly cocktail of pesticide residues".
According to tests conducted by the Pollution Monitoring Laboratory (PML) of the CSE
from April to August, three samples of twelve PepsiCo and Coca-Cola brands from
across the city were found to contain pesticide residues surpassing global standards by
30-36 times.

This had an adverse impact on the sales of Coca Cola, with a drop of almost 30-40%1 in
only two weeks on the heels of a 75% five-year growth trajectory. Many leading clubs,
retailers, restaurants, and college campuses across the country had stopped selling Coca-
Cola. This threatened the newly achieved leadership attained over Pepsi due to a
successful marketing campaign.

But this was not the end of Coca Cola’s troubles. There was widespread discontent
around many of their plants. For example, in Plachimada, Kerala, the communities in
and around the Coca Cola plant blamed the factory for their water problems. Due to
this, the local Panchayat decided not to renew the license issued to Coca Cola to
“protect public interest". The company has also been accused of illegally occupying a
portion of the village property resources in Mehdiganj, near Varanasi. However, there
are certain positives as well, with a 22 percent increase in its unit case volume last
quarter.

ECONOMIC ANALYSIS:

The Indian economy sustained the global economic slowdown in the previous year and
has shown a tremendous economic growth. It showed 8.6% of growth in the last quarter
of 2009-10 as compared to 5.8% same time in the previous year. It has emerged as an
attractive economy to invest in as many opportunities has been recognized.

 Economic growth

India is ranked second in economic growth, just behind China. Analysts have said that
India will be the third biggest economy of the world in the coming year behind China
and USA. With economic growth many opportunities have been seen, which have
attracted many foreign investor to the company.
Coca cola India returned to the country in 1993, despite few problems in the start they
have emerged as the king of soft drink industry in India. The strong economic growth of
India has resulted in coca cola to invest heavily in sales and distributive channels. It has
introduced two new products, Nimbu Fresh and an energy drink ‘Burn’.
Coca cola registered 22% growth in their unit case volume in the second quarter (April-
June). It is the 16th consecutive quarter of such growth out of which 13 are double digit.
Coca cola India’s growth is in contrast to its overall performance, the beverage king
reported a growth of just 5% (worldwide) in the same quarter.

 Inflationary effects

Inflation is one of the main problems that Indian economy has been facing for a year
now. Rising prices in the food and other products doesn’t only effect the consumers it
also has an adverse effect on a company. The inflation rate for the year 2009 was
recorded to be 11.49%. As prices have gone up in India for various products, especially
oil, there has been uncertainty in decision making of almost every company. Coca cola
India has also been affected by the same; it has been forced to think about their input
costs, as they have been rising due to inflation. Their expenditure has been rising, with
more costs in salaries, distribution channels and other operating costs. Beverage
industry being price competitive market, they have not revised their product prices.

 Exchange rate

The exchange rate of rupee to US Dollar has been stable but in the previous months the
rate has had a tumultuous period. Exchange rate determines at what price will the
company export its products and import whatever is required by it. The previous year,
the rate of rupee to USD touched 44, on an average it has been around 47, so the exports
earned less and the imports cost more. Therefore, coca cola India had to bear some low
profitable times. However, in the present scenario rates have reached a stable level and
exports are on an increasing trend.

SOCIAL ANALYSIS:

Coca- Cola returned to India in 1993 after a 16 year hiatus, amidst competition from
Leher Pepsi which had the advantage of entering the country 7 years earlier. Initially, it
struggled to find acceptance as there were already other brands such as Parle’sThums
Up which existed in the market. Coca-Cola had earlier focussed more on the American
way of life in their advertising campaigns, which the Indian consumers could not
identify with. Also, they did not focus on competition from other alternatives such as
lemonade, Lassi etc.

These products had been around for centuries, and were also cheaper alternatives to
Coca-Cola. However, things were brought under control when Thums Up was bought
over by Coca Cola, and more attention was paid by the company on their marketing
mix.
With the lowering of their prices by almost 15-20%, introduction of newer products
which appealed to the Indian tastes, more investment in market research and focussing
on the target group of 18-24 year olds, they were able to increase their market share and
build brand loyalty.

Coca Cola today, has made significant investments to build its business in India. It has
also generated employment for almost 1, 25, 000 people in related industry through its
procurement, supply and distribution cycles.

The soft drink industry today is growing steadily due to the booming economy,
strengthened middle class and low per capita consumption. With the increase in health
consciousness among the urban consumers, the company has introduced newer products
such as Diet Coke, which contain lesser calories than ordinary Coca Cola. This is also
responsible for the company shifting focus from carbonated drinks to Fruit Drinks /
Juices and bottled water.
The rural market had also been identified by Coca-Cola India as an attractive target,
with almost 70% of the country’s population. The company has recorded significant
growth in recent years

Coca Cola India has also taken many initiatives as a responsible corporate citizen, by
tying up with many NGOs such as BAIF (or BharatiyaAgro Industries Foundation),
SOS Children’s Villages and Save the Children. It has also taken initiatives to promote
education in rural areas.

TECHNOLOGICAL ANALYSIS:

Coca-Cola has started operations of its R&D facility in India, with the view of
localizing its product portfolio. The major focus would be on non-carbonated drinks and
flavours. The company’s R&D team has already rolled out drinks such as Maazaaam
panna and also a Maaza mango milk drink, and is exploring options to enter new
categories in India such as juices in localised flavours, energy drinks, sports drinks and
flavoured water. These initiatives are being taken by the company to further expand
their product portfolio.
With the increasing importance of 360 degree media tools and overall ad spend on
social media sets likely to grow by almost 44%, Coca-Cola has increased ad spend on
the internet. Case in point is the recent 2009 Sprite campaign, which was first launched
on the internet.

ENVIRONMENTAL ANALYSIS:

Coca Cola has earned a title of environment friendly company and Coca Cola India too
has followed in the footsteps. Coca Cola India’s Corporate Social Responsibility (CSR),
is an initiative that prioritizes many social and environmental issues; one of them being
‘water conservation’. They support many community based rainwater harvesting
projects and help lending conservation education.
The company has made sure that the following ideas are considered during their
operations:

1. Environmental due diligence before acquiring land

2. Environmental impact assessment before commencing project
3. Ground water and environment survey before selecting the site
4. Ban on purchasing CFC emitting refrigerating equipment
5. Waste water treatment facilities
6. Compliance with all regulatory environmental requirements
7. Energy conservation programs

By following these guidelines Coca-Cola India has helped the environment with
consistent profits and success. They seek to provide leadership in three different areas,
these are as follows:

1. Water efficiency and water quality

2. Energy efficiency
 3. Eliminating or minimizing solid waste.

Though being an environmental friendly company, Coca Cola India had to face its share
of controversies. On 4th February, 2003, Centre of Science and Environment in India,
released a report based on experiment done by Pollution Monitoring Laboratory. In the
experiment, they tested 17 packaged drinking water brands and found that, Coca Cola’s
Kinley has 15 times more pesticide residual levels than the stipulated norms, Bisleri had
59 times and Aqua plus had 109 times.

The main law governing the food safety is the 1954 Prevention of food alteration act,
which stated that pesticides should not be present in any food item but did not have law
against pesticides being present in soft drinks. However, the Food Processing Order
1955 stated that the main ingredient used in soft drinks must be ‘potable water’ but the
Bureau of Indian Standards had no prescribed standards for pesticides in water.
But later it was found that BIS had stated that pesticides should not be present or it
should not exceed 0.001 part per million. Further, the health ministry of India admitted
that ‘there were lapses in PFA regarding carbonated drinks’.

Fig 2.2 GRAPH OF PESTICIDES IN SOFT DRINKS IN INDIA

LEGAL ANALYSIS:

As the Indian consumer is getting more educated, the government is also paying special
attention to consumer laws. In the past, there were not so many laws protecting the
benefits to the consumer but now every business has to go by the law and fix their
operations, strategies so as to satisfy their consumers, and employees. Keeping in mind
the consumer laws, employment laws, antitrust law, discrimination laws etc. a business
should plan out everything.

 Consumer Laws

In the present scenario, consumer is the king, if a product is defective, not meeting the
stated standards a consumer can complain against the manufacturer. Complaining and
getting the verdict the court has made very fast and efficient as government of India has
installed new consumers courts. Their main job is to see that the consumer benefits are
being met or not. When producing their beverages, Coca Cola India has to make sure
that they have written price, manufacturing date, expiry date, batch no, nutritional facts
are written on the packed product.

 Employment Laws

Ministry of Labour makes the laws for proper employment in the country. They have
stipulated norms on employing people from the country and getting expatriates in the
company as well. India has strict laws against employing child labour. Being a male
dominated society, the ministry has made sure that female employees are treated with
respect and given equal importance at the work place. Every field of work has got its
own wage, these are to meet the norms and laws set by the labour ministry. When
employing anyone, coca cola India cannot discriminate on social, regional or any
racists’ basis. If it is found that the company has been violating the law, it has to face
strict action and fines.

 Health and safety laws

As coca cola produces a product that is consumed by the consumer as a food item, there
are laws that the company must abide by when producing it. Ministry of Food
Processing Industries makes and oversees the laws and norms for the food processing
industries.
The Indian Parliament has recently passed the Food Safety and Standards Act, 2006 that
overrides all other food related laws.
It will specifically repeal eight laws:

 The Prevention of Food Adulteration Act, 1954.

 The Fruit Products Order, 1955.
 The Meat Food Products Order, 1973.
 The Vegetable Oil Products (Control) Order, 1947.
 The Edible Oils Packaging (Regulation) Order, 1998.
 The Solvent Extracted Oil, De oiled Meal, and Edible Flour (Control)
Order, 1967.
 The Milk and Milk Products Order, 1992.
 Essential Commodities Act, 1955 relating to food.


From now on, the act establishes a regulatory body, the Food Safety and Standards
Authority of India. Anything that coca cola makes, have to make accordingly to the
laws. They have to check the weight, volume and ingredients of the product. The export
or the import of the products by the company has to meet the quality standards
stipulated by the law.

 Anti-trust law

The Competition Commission of India was made under the Indian Competition Act
2002, Monopolies Restrictive and Trade Practices Act 1969 was replaced by it. This
committee looks after all the issues regarding unethical means of doing business,
competition issues and any dispute between two different business entities. CLG
competition and anti-trust practices are as follows:

 Representing clients before the MRTP Commission in ‘monopolistic and

restrictive trade practices’ and ‘unfair trade practices’ matters.
 Legal Advice and sophisticated insight into the international best
practices on competition law.
 Consultancy services on specific issues - supply and distribution, pricing
and marketing, ‘promotional materials’, mergers, acquisitions, amalgamation,
licensing, joint operation and research, joint buying, ‘dominant-firm’ status etc.
  Competition Audit and Due Diligence for developing appropriate
guidelines for employees, distributors, agents, franchisees etc.
 Legal Due Diligence on anti-competition, unfair and restrictive market
practices.
 Drafting claims, counter-claims, replies, rejoinders, representations etc.
on Competition Law and related legal issues.
 Strategic policing on anti-competition market practices and trends.
 Policy due diligence for mergers, acquisitions, joint ventures with
appropriate anti-trust safeguard measures and policy.

All these laws help Coca Cola India to maintain its own brand and values. Any other
business trying to copy the brand of coca cola will face the strict action against itself.
These laws help every business to compete in a fair environment. As it is known that the
coca cola and Pepsi are the fiercest rivals in the beverage industry, the CCI makes sure
that either of them does not indulge in unfair means to make profits and hurt each
other’s business.

SWOT ANALYSIS OF COCA-COLA INDIA

 STRENGTHES WEAKNESSES
Distribution Network. Health Care Issues.
Strong Brand Image. Small Scale Sector
Reservations.
Low Cost of Operation.

SWOT
ANALYSIS
OPPORTUNITIES
THREATS
Large Domestic Markets.
Imports.
Export Potential.
Tax & Regulatory Sector.
High Income among People.
Slowdown in Rural Demand.

Fig 2.3 SWOT ANALYSIS OF COCA-COLA INDIA

STRENGTHES:

 Distribution Network

The Company has a strong and reliable distribution network. The network is formed on
the basis of the time of consumption and the amount of sale yielded by a particular
customer in one transaction. It has a distribution network consisting of a number of
efficient salesmen, 700,000 retail outlets and 8000 distributors. The distribution fleet
includes different modes of distribution, from 10 tonne to open bay three wheelers that
can navigate the narrow alleyways of Indian cities – constantly keep Coca-Cola brands
available in every nook and corner of the Country’s remotest areas.

 Strong Brand Image

Coke has its history of about more than a century and this prolonged sustenance has
definitely added to the brand image in the minds of the consumers and to its wallet. The
products produced and marketed by Coca-Cola India have a strong brand image.
Strong brand names like Coca-Cola, Fanta, Thums up, Limca and Maaza add up to the
brand name of Coca-Cola Company as a whole. Coca Cola India for the first time has
come out with corporate campaign in India targeting its stakeholders. The multimedia
campaign “Little Drops of Joy " is aimed at raising the corporate brand image of the
company which took a heavy beating with a number of controversies it faced in
different domains.
The new campaign is a part of a complete restructuring exercise in the Indian arm of
this global change. Coca Cola recently announced its new corporate strategy called the
“5 Pillar" strategy. The company has identified the 5 pillars as :

 People.
 Planet.
 Portfolio.
 Partners.
 Performance.

 Low Cost Of Operations

In light of the company’s Affordability Strategy, Coca-Cola went about bringing a cost-
focus culture in the company. This included procurement Efficiencies – through focus
on key input materials, trade discipline and control and proactive tax management
through tax incentives, excise duty reduction and creating marketing companies. These
measures have reduced the costs of operations and increased profit margins.

WEAKNESSES:
  Health Care Issues

In India, there exists a major controversy concerning pesticides and other harmful
chemicals in bottled products including Coca-Cola. In 2003, the Centre for Science and
Environment (CSE), a non- governmental organization in New Delhi, said aerated
waters produced by soft drinks manufacturers in India, including multinational giants
PepsiCo and Coca-Cola, contained toxins including lindane, DDT, malathion and
chlorpyrifos - pesticides that can contribute to cancer and a breakdown of the immune
system.

 Small Scale Sector Reservations

The Company’s operations are carried out on a small scale and due to Government
restrictions and ‘red-tapism’, the Company finds it very difficult to invest in
technological advancements and achieve economies of scale.

OPPORTUNITIES:

 Large Domestic Markets

The domestic market for the products of the Company is very high as compared to any
other soft drink manufacturer. Coca-Cola India claims a 58 per cent share of the soft
drinks market; this includes a 42 per cent share of the cola market.

Other products account for 16 per cent market share, chiefly led by Limca. The
company appointed 50,000 new outlets in the first two months of this year, as part of its
plans to cover one lakh outlets for the coming summer season and this also covered
3,500 new villages. In Bangalore, Coca-Cola amounts for 74% of the beverage market.

 Export Potential
The Company can come up with new products which are not manufactured abroad, like
Maaza etc and export them to foreign nations. It can come up with strategies to
eliminate apprehension from the minds of the people towards the Coke products
produced in India so that there will be a considerable amount of exports and it is yet
another opportunity to broaden future prospects and cater to the global markets rather
than just domestic market.

 Higher Income Among People

Development of India as a whole has lead to an increase in the per capita income
thereby causing an increase in disposable income. Unlike olden times, people now have
the power of buying goods of their choice without having to worry much about the flow
of their income. Coca-Cola Company can take advantage of such a situation and
enhance their sales.

THREATS:

 Imports

As India is developing at a fast pace, the per capita income has increased over the years
and a majority of the people are educated, the export levels have gone high. People
understand trade to a large extent and the demand for foreign goods has increased over
the years.
If consumers shift onto imported beverages rather than have beverages manufactured
within the country, it could pose a threat to the Indian beverage industry as a whole in
turn affecting the sales of the Company.

 Tax & Regulatory Sector

The tax system in India is accompanied by a variety of regulations at each stage on the
consequence from production to consumption. When a license is issued, the production
capacity is mentioned on the license and every time the production capacity needs to be
increased, the license poses a problem. Renewing or updating a license every now and
then is difficult. Therefore, this can limit the growth of the Company and pose
problems.

 Slowdown In Rural Demand

The rural market may be alluring but it is not without its problems: Low per capita
disposable incomes that is half the urban disposable income; large number of daily
wage earners, acute dependence on the vagaries of the monsoon; seasonal consumption
linked to harvests and festivals and special occasions; poor roads; power problems; and
inaccessibility to conventional advertising media. All these problems might lead to a
slowdown in the demand for the company’s products.
KEY PERSONS OF COCA COLA

Herbert A. Allen

President and Chief Executive Officer

Allen & Company Incorporated

Herbert A. Allen has been director of The Coca-Cola Company since 1982. Mr. Allen is
President, Chief Executive Officer and a Director of Allen & Company Incorporated, a
privately held investment firm, and has held these positions for more than the past five
years. He previously served as a Director of Convera Corporation from 2000 to 2010.

Ronald W. Allen

Former Chairman of the Board, President, Chief Executive Officer

Marc Bolland

Head of European Portfolio OperationsThe Blackstone Group L.P.

Ana Botín

Executive Chairman
Banco Santander, S.A.

RICHARD M DALEY
Executive chairman
 Barry Diller
Executive chairman of the board and senior

IA C/

Helene D. Gayle

Chief Executive Officer

The Chicago Community Trust

Expedia, Inc.
Alexis M. Herman
Chair and Chief Executive Officer

New Ventures, LLC

Bobby Kotick
President, Chief Executive Officer
and Director

Activision Blizzard, Inc.

Maria Elena Lagomasino

Chief Executive Officer and Managing Partner

WE Family Offices

Sam Nunn
Co-Chairman and Former Chief Executive Officer

Nuclear Threat Initiative (NTI)

James Quincey
President and Chief Executive Officer
The Coca-Cola Company

David B. Weinberg

Chairman of the Board and Chief Executive Officer

Judd Enterprises, Inc.

SOUTH WEST ASIAN BUSINESS UNIT

T. Krishnakumar (KK)
President Coca-Cola India and
South West Asia Business Unit

Christina Ruggiero,
Chief Executive Officer,
Hindustan Coca-Cola
AWARDS AND RECOGNISITION
 UNIT - 3
RESEARCH
METHODOLOGY
 OBJECTIVES OF THE STUDY

 The main objective of the project is to analyse and study in efficient way
the current position of Coca- Cola Company.

 To perform PESTLE and SWOT analysis of Coca-Cola globally as well

as locally. This would help us identify areas of potential growth.

 The study was aimed to perform Market Analysis of Coca-Cola

Company & find out different factors effecting the growth of Coca-Cola.

 Another objective of the study was to perform Competitive analysis

between Coca-Cola and its competitors.

 To understand the reasons behind the purchase of Coca-Cola products.

SCOPE OF THE STUDY:-

This study basically tries to discover the current position of Coca-Cola in the
market. It also tries to discover the preferences of the customers when posed with a
choice between Coca-Cola and Pepsi. It is primarily directed to the general public
but was done only in New Delhi, Noida and Greater Noida

Research Design

A research design is the specification of methods and procedures for acquiring the
needed information. It is overall operational pattern or framework of the project that
stipulates what information is to be collected from which source by what procedure.
There are three types of objectives in a marketing research project:-

 Exploratory Research.
 Descriptive Research.
 Casual Research.
 1. Exploratory Research:-

The objective of exploratory research is to gather preliminary information that will

help define problems and suggest hypothesis.

2. Descriptive Research:-

The objective of descriptive research is to describe things, such as the market

potential for a product or the demographics and attitudes of consumers who buy the
product.

3. Casual Research:-

The objective of casual research is to test hypothesis about casual and effect
relationships.

Based on the above definitions it can be established that this study is a Descriptive
Research as the attitudes of the customers who buy the products have been stated.
Through this study we are trying to analyse the various factors that may be responsible
for the preference of Coca-Cola products.

SOURCES OF DATA

The data has been collected from both primary as well as secondary sources.

Secondary Data:-

It is defined as the data collected earlier for a purpose other than one currently being
pursued.
As a researcher I have scanned lot of sources to get an access to secondary data which
have formed a reference base to compare the research findings. Secondary data in this
study has provided an insight and forms an outline for the core objectives established.
The various sources of secondary data used for this study are:-

 Newspapers.
 Magazines.
 Text books.
 Marketing reports of the company.
 Internet.

Primary Data:-

The primary data has been collected simultaneously along with secondary data for
meeting the established objectives to provide the solution for the problem identified
in this study.
The methods that have been used to collect the primary data are:-

 Questionnaire.

RESEARCH MEASURING TOOLS & TECHNIQUES

The primary tool for the data collection used in this study is the respondent’s response
to the questionnaire given to them. The various research measuring tools used are:-

 Questionnaire.
 Personal interview.
 Tables.
 Percentages.
 Pie-charts.
 Bar-charts.
 Column charts.
 SAMPLING DESIGN

An integral component of a research design is the sampling plan. Especially it addresses

three questions: Whom to survey (sample Unit), how many to survey (Sample Size) and
how to select them (sampling Procedure). Making the census study of the entire
universe will be impossible on the account of limitations of time and money. Hence
sampling becomes inevitable. A sample is only his portion of population. Properly done,
sampling produces representative data of the entire population.

SAMPLE SIZE:-

i. Through questionnaire – 50 respondents.

SAMPLING TOOL:-

Questionnaire was used as a main tool for the collection of data, mainly because it gives
the chance for timely feedback from respondents. Moreover respondents feel free to
disclose all necessary detail while filling up a questionnaire. Respondents seeking any
clarification can easily be sorted out through tool.

Sampling Tools Respondents Number

Questionnaire Customers 50
Total 50

Table – 1.7
FIELD WORK:-

The study was conducted in New Delhi, Noida and Greater Noida.
 The questionnaires were given to the respondents to fill in order to get
their feedback.
 Questions were read out to the respondents and the answers were noted.
LIMITATIONS OF THE STUDY:-

The main purpose of this study is get idea about the preference of the customers towards
various Coca-Cola products. But there are certain factors which affects this study they
are as follow:
 Since the sampling procedure was judgmental, the sample selected may
not be true representative of the population.

 Economic and market conditions are very unpredictable (Present and

future).

 The project duration is limited to 4 weeks so it limits the area of study.

 The study was confined to New Delhi, Noida and Greater Noida due to
which the result cannot be applied universally.
 UNIT - 4
DATA ANALYSIS AND INTERPRETATION
 1) A question was asked to the customers whether they consume soft drinks or not
and the following are the results.

ATTRIBUTES NO.OF % OF RESPONDENTS

RESPONDENTS
Yes 45 90%
No 05 10%
Total 50 100%

The above table depicts that 90% of the customers consume soft drinks.

Graph showing the percentage of the nature of consumption.

100

90

80

70

60

50 Column2
Column1
40

30

20

10

0
yes no

The survey was conducted on 50 respondents wherein I found that about 90% of the
surveyed CONSUMERS CONSUMED SOFT DRINKS AND ONLY ABOUT 10% did
not.
 2) A question was asked to the consumers to know how often they consume .

ATTRIBUTES NO. OF % OF RESPONDENTS

RESPONDENTS
Daily 35 70%
Twice in a week 9 18%
Once in a week 5 10%
Once in a month 1 2%
Total 50 100%

The above table depicts that 18% of the consumers consume soft drinks twice
week and the major percentage of consumers consume soft drinks daily.

Graph showing the soft drinks consumption habit of the people.

80

70

60

50

40 Series 2
Series 3
30

20

10

0
daily twice in a week once in a week once in a month

The survey was conducted on 50 respondents wherein I came to know that more than
50% i.e. about 70% of the surveyed people consumed soft drinks daily.
 3) A question was asked to the consumers that about their favourite soft drink and
the following are the results .

ATTRIBUTES NO.OF RESPONDENTS % OF RESPONDENTS

Coca- cola 14 28%
Thumbs up 16 32%
Sprite 7 14%
7 up 7 14%
Dew 4 08%
Others 2 04%
Total 50 100%

The above table depicts that 32% of the consumers consume thumbs up , 14% of the
consumers consume sprite , and 28% of the consumers consume coca-cola.

Graph showing percentage of how favourite a particular soft drink of the surveyed
consumer is.

35

30

25

20

Series 2
15

10

0
coca-cola thumbs up sprite 7 up dew others

The survey was conducted on 50 respondents wherein I learn about how favourite a
particular soft drinks is. Here thumbs up took the lead by 32% and coca-cola by 28%.
 4) A question was asked to the consumers whether the price is affordable or not
and the following are the results.

ATTRIBUTES NO. OF % OF RESPONDENTS

RESPONDENTS
Affordable 38 76%
Costly 06 12%
Lesser 03 06%
Can’t say 03 06%
Total 50 100%

The above table depicts that 76% of the respondents can afford , 12% of the respondents
feel the product is costly , and 6% of the respondents feel the product is less costly than
it should be. 6% of the respondents cannot say about the product price.

Graph showing the percentage of affordability of soft drinks.

80

70

60

50

40 Series 2
Series 3
30

20

10

0
affordable costly lesser can't say

The survey was conducted on 50 respondents wherein I came to know that the soda
products were very much affordable.
 5) A question was asked to the consumers about his reasons for preferring the drink
and following are the results.

ATTRIBUTES NO. OF % OF RESPONDENTS

RESPONDENTS
Taste 20 40%
Quenching thirst 07 14%
Strong 13 26%
Gas content 08 16%
Others 02 04%
Total 50 100%

The above table depicts that 40% of the consumers consume the product preffering the
taste, 14% of the consumers consume the product to quench the thirst and 16% of the
consumers consume the product for its gas content.

Graph showing the percentage of preference of the drink.

45

40

35

30

25
Series 1
20 Series 2
15

10

0
taste quenching thirst strong gas content others

The survey was conducted on 50 rspondents wherein by looking into the above given
data I can say that 40% of the surveyed respondents drink soft drinks for the taste.
 6) A question was asked to the consumers about the role of flavour in the product
promotion and the following are the results.

ATTRIBUTES NO. OF % OF RESPONDENTS

RESPONDENTS
Very efficient 30 60%
Efficient 11 22%
Neither efficient nor 04 8%
inefficient
Inefficient 05 10%
Total 50 100%

The above table depicts that 22 % of the consumers feel the flavour is efficient , 60% of
the consumers feel the flavour is very efficient, 8% of the consumers feel the flvour is
neither efficient nor inefficient, 10% of the consumers feel the flavour is inefficient.

Graph showing the percentage of how the role of flavour in the product promotion if
effective.

70

60

50

40
Series 1
30
Series 2

20

10

0
very efficient efficient neither efficient nor inefficient
inefficient

The survey was conducted on respondents wherein I came to know that flavour played
most important role in the product promotion.
 7) A question was asked to the consumers about their opinion on packaging of the
product and the following are the results.

ATTRIBUTES NO. OF % OF RESPONDENTS

RESPONDENTS
Very good 15 30%
Good 35 70%
Neither good nor bad 00 00%
Bad 00 00%
Total 50 100%

Graph showing percentage of the consumer’s opinion on packaging of the product.

80

70

60

50

40 Series 1

30 Series 2

20

10

0
very good good neither good nor bad
bad

The survey was conducted on 50 respondents wherein I came to know that there are no
negative remarks towards the packaging of the products.
 8) A question was asked to the consumers about the impact on product promotion
and following are the results.

ATTRIBUTES NO. OF % OF RESPONDENTS

RESPONDENTS
Very effective 20 40%
Effective 25 50%
Neither effective nor 03 06%
ineffective
Ineffective 02 04%
Total 50 100%

Graph showing the percentage of effective the product promotion is.

60

50

40

30 Series 1
Series 2
20

10

0
very effective effective neither effective ineffective
nor ineffective

The survey was conducted on 50 respondents wherein I came to know about the
effectiveness of the product promotion. Hereabout 50% of the surveyed consumer said
it as effective and 40% said it was very effective.
 9) A question was asked to the consumers about the product availability and the
following are the results.

ATTRIBUTES NO.OF RESPONDENTS % OF RESPONDENS

Within the reach 43 86%
So far 5 10%
Difficult to get 2 04%
Total 50 100%

Graph showing the percentage of how easily the products are available.

100

90

80

70

60
Series 1
50
Series 2
40 Series 3
30

20

10

0
within reach so far difficult to get

The survey was conducted 50 respondents wherein 86 % of the surveyed respondents

said that the product was within their area of reach.
 10) A question was asked to the consumers about the media , which shows impact
on product promotion , the following are the results.

ATTRIBUTES NO.OF RESPONDENTS % OF RESPONDENTS

T.V 30 60%
News paper 05 10%
Hoarding 07 14%
Internet 08 16%
Total 50 100%

Graph showing the percentage level of the media through which the consumers came to
know about the product.

70

60

50

40 Series 1
Series 2
30
Series 3

20

10

0
t.v news paper hoarding internet

The survey was conducted on 50 respondents wherein I learned that televisions are the
most effective media of promotion.
 UNIT - 5
FINDINGS ,
SUGGESTION ANDCONCLUSION
 FINDINGS

The study undertaken has highlighted certain facts . they are

1. The important factors that influence the purchase

decisions of a soft drink are the taste and flavour.

2. Besides the factors mentioned above the other important

factors that influence the purchase decisions were found
to be advertising and price.

3. Sales promotion program taken up by the company is

also popular among the respondents. The product is very
much popular among the respondents . the product is very
much popular for its easy availability.
 SUGGESTIONS

The suggestions made in this section are based on the market study conducted as part of
“Coca-Cola India”. The suggestions are arranged in order of priority, highest first.

 Perform a detail demand survey at regular interval to know about the

unique needs and requirements of the customer.

 The company should make hindrance free arrangement for its

customers/retailers to make any feedback or suggestions as and when they feel.

 The company should focus to bring some more flavours like health
drinks and other low-calorie offerings.Coca-Cola India can also introduce some
fruit based drinks, as it has already entered the energy drink arena with “Burn”.

 Coca-Cola’s distribution channel is mostly through retail. Whereas the

competitors also concentrates more on the multiplexes, pubs and restaurants.
Coca-Cola should try to increase their distribution in these areas.

 The company must keep a watch on its primary competitors in market

in order to be able to compete with them.

 The company should use new attractive system of word of mouth

advertisement to keep alive the general awareness in the whole market as a
whole.

 The company should be always in a position to receive continuous

feedback and suggestions from its customers/ consumers as well as from the
market and try to solve it without any delay to establish its own good
credibility.

 A strong watch should be kept on distributors so that the goodwill of

the BRAND doesn’t get affected.
 CONCLUSION

Though there were certain limitations in the study that was conducted. The sample
allowed for some conclusions to be drawn on the basis of analysis that was done on the
data collected.

The data has clearly indicated that Coca-Cola products are more popular than the
products of Pepsi mainly because of its TASTE, BRAND NAME,
INNOVATIVENESS and AVAILABILITY, thus it should focus on good taste so that
it can capture the major part of the market. The study also indicated that the consumers
are satisfied with the Coca-Cola products and purchase them without any specific
occasions.

In today’s scenario, customer is the king because he has got various choices around
him. If you are not capable of providing him the desired result he will definitely switch
over to the other provider. Therefore to survive in this cutthroat competition, you need
to be the best. Customer is no more loyal in today’s scenario, so you need to be always
on your toes.
 UNIT- 6

BIBILOGRAPHY
BIBLIOGRAPHY

BOOKS:

 Philip Kotler and kevin lane keller ,“Marketing Management: Analysis,

Planning, Implementation, and Control” , Prentice Hall .
 C.R. Kothari , “research methodology “ , new age international publishers.

WEBSITES:
 www.thecoca-colacompany.com
 www.news.bbc.co.uk
 www.india-server.com
 www.magindia.com
 www.coca-colaindia.com
 www.wikiinvest.com
 www.open2.net
 www. Shopify .com

OTHERS
 Annual report of Coca-Cola 2017.
 Annual report of Coca-Cola 2016.
UNIT- 7

APPENDIX QUESTIONNAIRE
QUESTIONNAIRE
 NAME:
..............................................................................
 GENDER:
a) Male b) Female

 Do you drink Soft drinks?

a) Yes
b) No

 How often do you have soft drinks per week?

a) Once a week
b) Twice a week
c) Thrice a week
d) Everyday
e) Rarely

 What drink comes to your mind when you think of soft drinks?
a) Coca-Cola
b) Pepsi
c) Other products of Coca-Cola
d) Other products of Pepsi
e) Other drinks

 What quantity do you usually prefer to buy?

a) 200-250 ml Glass bottle
b) 300 ml Can
c) 500 ml Pet bottle
d) 1 litre
e) 2 litre

 What do you feel about Coca-Cola product range?

a) Excellent
b) Good
c) Satisfactory
d) Below Satisfactory
e) Bad
  What occasions do you prefer to buy Coca-Cola products?
a) Festivals
b) Picnics
c) Parties
d) Cinemas
e) Just like that

 What is your most preferred channel for purchasing Coca-Cola products?

a) Super markets
b) Retails
c) Vendor Machines
d) Pubs & Restaurants
e) Multiplexes

 How much do you spend on Coca-Cola products per week?

a) 50-100
b) 100-150
c) 150-200
d) Above 200

 Put (X) mark in which ever you feel is appropriate?

Parameters / Product Coca-Cola Products Pepsi Products
1) Branding
2) Quality
3) Price
4) Taste
5) Availability
6) Satisfaction

 What kind of products do you want Coca-Cola to introduce in the future?

a) Fizzy Drinks
b) Fruit Drinks
c) Energy Drinks
d) Alcoholic Drinks
...............................................................................................................

Thank you!