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    284 distribution network of pepsi in jaunpur 284 distribution network of pepsi in jaunpur Document Transcript

    • SUMMER TRAINING REPORT ONDISTRIBUTION SYSTEM & MARKET SHARE OF PEPSICO NOIDA Submitted for partial fulfillment of award of POST GRADUATE DIPLOMA IN MANAGEMENT By ACHAL SHARMA PGDM 3rd session Under the supervision of MR. MANISH (Manager - Marketing) ACCURATE BUSINESSSCHOOL GR. NOIDA
    • 2
    • CERTIFICATECertified that ACHAL SHARMA has carried out the Project work presented in thisreport entitled Distribution Network & Market Share of Pepsi in NOIDA for theaward of the POST GRADUATE DIPLOMA IN MANAGEMENT fromACCURATE BUSINESS SCHOOL GR.NOIDA under my supervision. The reportembodies result of original work and studies carried out by student himself andthe contents of the report do not form the basis for the award of any other degreeto the candidate or to anybody else. Dr.Devendra pathak Director ABS Greater Noida 3
    • ACKNOWLEDGEMENT I would like to express my heartfelt gratitude to my Faculty Guide Mrs. Neeti Arora, Accurate Business School, Greater Noida. without whom the completion of this project would not have been possible. I also thank my friends who helped me a lot while doing the research work. Last but not the least, I would like to thank persons for putting in their time and effort in completion of project who helped me in various ways, directly or indirectly.ACHAL SHARMA 4
    • DECLARATIONI hereby declare that report in titled “Distribution Network Market Share of Pepsi inNOIDA” submitted by me in partial fulfillment of the award for PGDM, is my originalwork and that is not previously formed the basis for the award of any other degree,diploma, fellowship or other similar title.And this project is completed and submitted under the guidance of Mr. Manish. Theimperial finding in this project is based on data collected by me.Place:- GR. NOIDA ACHALSHARMA 5
    • TABLE OF CONTENTSS. NO.1. Certificate of company2. Certificate of Supervisor3. Acknowledgement3. Declaration4. Preface5. Executive Summary6. Company Profile7. Product Positioning Of Pepsi8. Strength and Weaknesses of Pepsi Co.9. Pepsi-The Indian Experience10. Pepsi - Brands And Pack Profile11. The RKJ Group12. Locations Of Bottling Plants Of Pepsi In India 6
    • 13. The Indian Beverage Industry14. Hierarchy of Executives in Pepsi, Lucknow Unit15. Objective Of The Project16. The Market Research Process17. Presentation of data18. Findings And Observations19. Recommendation20. Conclusion21. Questionnaire22. Bibliography23. Annexure 7
    • PREFACE Summer project is necessary part for fulfillment of PGDM course. The emphasisin the project is providing the study and an insight into Indian FMCG Business Scenario. The Summer Project is designed to provide participation of PGDM program as on the job experience. This has given a chance to try and apply the academic knowledge and gain insight into corporate culture. This helps in developing decision-making abilities and emphasizes on active participation by the student. I undertook my Project in Varun Beverages, a leading Bottler and Marketing partner of the Pepsi Foods. During the training, I had worked on the project “Distribution System & Market Share of Pepsi in.NOIDA ” I gained valuable experience & knowledge during the survey. The Project consists of my findings after tabulation of collected data, then analyzed conclusions were drawn and finally suggestions were put forward. 8
    • EXECUTIVE SUMMARYThe distribution network of PEPSI is well known for its efficiency but companyconstantly strives for the betterment of their distribution network system.Emphasis of our study was to focus on the customer of company i.e., the retailers.The Retail Mapping of NOIDA is an integral step for the assessment,development and betterment of this system. The distribution system not onlycomprises the movement of the products but also incorporates the merchandisingof the product, which is very broad in its purview.The project incorporates the analysis of the performance of PEPSI and probinginto opportunities of increasing the market share in NOIDA . The entire processhad to be in an organized manner in order to deliver meaningful results for thepurpose of decision-making. The project was that of market research with surveysand observations as its major phases with the objective of gathering of allimportant information material for strengthening the position of PEPSI inNOIDA. 9
    • PEPSI boasts of having the maximum market share in the beverage segment inNOIDA and is in constant process for the betterment of its productperformance and customer as well retailer’s satisfaction. 10
    • THE COMPANY PROFILE: PEPSI CO.Caleb Bradham a New Bern N.C druggist who formulated Pepsi Cola foundedPepsi Cola Beverage business at turn of the century. Pepsi Cola Company nowproduces and markets nearly 200 refreshment beverages to retail, restaurants andfood service customers in more then 190 countries and territories around theworld and generates revenue of over 18 billion dollars PepsiCo WorldHeadquarters is located in Purchase, New York.Pepsi Co. is the world leader in the food chain business. It consists of manycompanies amongst which the prominent ones are Pepsi Cola, Frito-lay, Pepsifood international, Pizza-hut, KFC and Taco bell. The group is presently intothree most profitable businesses namely, Beverages Snacks foods andRestaurants.The beverages segment primarily market it Pepsi diet, Pepsi Mountain Dew andother brands worldwide and 7UP outside the U.S.market. They are positioned in 11
    • close competition with Coca Cola inc. of USA. The Snacks food divisions manufacture and distribute and markets others snacks worldwide.The restaurant segment primarily consists of the operations of the worldwide Pizza-Hut,Taco bell and KFC chains PFS, PepsiCo’s restaurant distribution operation, supplies toCompany owned and Franchise restaurants in the U.S. When Coca Cola changed its formula in 1985, Pepsi Stepped up its competition with its long time archrival claiming victory in the Cola-wars. Coke and Pepsi expended their rivalry to tea in 1991 when Pepsi formed a venture with No.1 Lipton in response to Coke’s announced venture with Nestle (Nestea). “Pepsi Co is going blue”. This was the new color adopted by the company to strengthen its brand globally. Also the company is changed colors from Generation X to GENERATION NEXT. Although Pepsi holdings over the years have become diverse in such fields as the 12
    • Snacks industry and Restaurants industry, this portfolio will discuss its corebusiness and its highly successful business of Beverages. The soft drink industrycustomer base is probably the widest and deepest base in a world that is floodedwith some many categories. According to Beverage Digest the customer base forsoft drinks is a whopping 95% of regular users in the United States. Thisrepresents a large field of potential customers for Pepsi Cola.Pepsi prefers to segment itself as the beverage choice of the “NewGeneration”, “Generation Next”, or just as the “Pepsi Generation”. Theseterms adopted in Pepsi’s advertising campaigns are referring to the markets thatmarketers refer to as Generation X. The Generation X consumer is profiled to bebetween the ages of 18 to 29. They have high expectations in life and are verymobile and active. They adopt a lifestyle of living for today and not worryingabout long-term goals. Those Pepsi’s main emphasis on this segment they alsohave a focus on the 12 to 18 year old market. Pepsi believes if they can get this 13
    • market to adopt their product then they could establish a loyal customer for life.Pepsi Cola throughout its 100 years of existence has developed much strength.One of the strengths that has developed Pepsi into such a large corporation is astrong franchise system. The strong franchise system was the backbone of successalong with a great entrepreneur spirit. Pepsi’s franchise system and distributors iscredited to bring Pepsi from a 7,968 gallons of soda sold in 1903 to nearly 5billion gallons in the year of 1997.Pepsi also has the luxury to spend 225 million dollars in advertising a year. Thisenormous ad budget allows Pepsi to reinforce their products with reminderadvertising and promotions. This large budget also allows Pepsi to introduce newproducts and very quickly make the consumer become aware of their newproducts.Pepsi also has had the good fortune of making very wise investments. Some of thebest investments have been in their acquiring several large fast food restaurants.They have also made wise investments in snack food companies like Frito Lay,which at present time is the largest snack company in the world. Probably high on 14
    • the list of strengths is Pepsi’s beverage line up.Pepsi has four soft drinks in the top ten beverages in the world. These brandsare Pepsi, Mountain Dew, Diet Pepsi, and Caffeine Free Diet Pepsi. Someother strong brands are All Sport, Slice, Tropicana, Starbucks, Aquafina and alicense agreement with Ocean Spray Juices. 15
    • PRODUCT POSITIONING OF PEPSI CO.Pepsi prefers to position itself as the beverage choice of the “New Generation”,“Generation Next”, or just as the “Pepsi Generation”.These terms adopted in Pepsi’s advertising campaigns are referring to the marketsthat marketers refer to as Generation X. The Generation X consumer is profiledto be between the ages of 18 to 29. They have high expectations in life and arevery mobile and active. They adopt a lifestyle of living for today and notworrying about long-term goals. Though Pepsi’s main emphasis is on thissegment but they also have a focus on the 12 to 18 year old market. 16
    • The rich deep blue coloring represents eternal youthfulness and openness.Marketing plans like “Yeh Dil Maange More”, “Got Another Pepsi”, “Ye PyassHai Badi” has made Pepsi one of the coolest brands recognized among teens inthe top five and the only beverage product in this category. 17
    • STRENGTH AND WEAKNESSES OF PEPSI CO.Pepsi Cola throughout its 100 years of existence has developed much strength.One of the strengths that have developed Pepsi into such a large corporation is astrong franchise system. The strong franchise system was the backbone of successalong with a great entrepreneur spirit. Pepsi’s franchise system and distributors iscredited to bring Pepsi from a 7,968 gallons of soda sold in 1903 to nearly 5billion gallons in the year of 1997.Pepsi also has the luxury to spend 225 million dollars in advertising a year. Thisenormous ad budget allows Pepsi to reinforce their products with reminderadvertising and promotions. This large budget also allows Pepsi to introduce newproducts and very quickly make the consumer become aware of their newproducts. 18
    • Pepsi-Cola provides advertising, marketing, sales and promotional support toPepsi-Cola bottlers and food service customers. This includes some of the worldsbest-loved and most-recognized advertising. New advertising and excitingpromotions keep Pepsi-Cola brands young. The company manufactures and sellssoft drink concentrate to Pepsi-Cola bottlers. The company also provides fountainbeverage products.Pepsi also has had the good fortune of making very wise investments. Some of thebest investments have been in their acquiring several large fast food restaurants.They have also made wise investments in snack food companies like Frito Lay,which at present time is the largest snacks company in the world.Probably high on the list of strengths is Pepsi’s beverage line up. Pepsi has foursoft drinks in the top ten beverages in the world. These brands are Pepsi,Mountain Dew, Diet Pepsi, and Caffeine Free Diet Pepsi. Pepsi also has theNo.1 tea in the United States, Lipton Tea. Some other strong brands are All Sport, 19
    • Slice, Tropicana, Starbucks, Aquafina and a license agreement with Ocean SprayJuices.Pepsi Cola like any company has weaknesses. Ironically, the one strength that hasbeen credited for most of its success in the past has now become a weakness forPepsi.This former strength is the franchise system. The franchise system in PepsiCorporate view has become a liability. Pepsi in today’s market must be able to actas one instead of several separate units.The franchise system has become a hurdle to Pepsi because many of thesefranchises have become very strong and will not be dictated by PepsiCo on howto handle their operations. Some of these franchises are unwilling to supportcertain Pepsi products and at times produce their own private label products thatare in direct competition with Pepsi products.Secondly the franchisees are not willing to make capital expenditures to keep up 20
    • with Coca-Cola who is a firm believer in reinvesting into their infrastructure(Coca Cola at present time does not operate a franchise bottling system).As mentioned earlier Pepsi has tried to elevate this problem by spinning off theirinterest in fast food restaurants but at present time are still guilty by association tomany of the large fountain accounts. The franchise system has also affectedfountain sales due to the fact franchisees are not willing to buy expensive fountainequipment to place in accounts mainly because the profit margin is so low andcould take years to recoup their investment. Pepsi also has a weakness in theinternational beverage market.Unfortunately for Pepsi they were a “Johnny Come Lately” into this arena. Pepsihas tried to enter this market by trying to do in three years what took Coke 50years to do. This area will take years for Pepsi to mature simply due to Coke’sdominance in the international market and the strong ties that Coke has developed 21
    • with these markets and their governments.Pepsi customers buy nearly five billion gallons of soft drinks per year. Pepsicustomers buy their products because of taste, price, packaging and promotionalfactors and of a wide variety of brands. Pepsi customers also buy their productsdue to the high accessibility of Pepsi brands.Pepsi products are distributed to many outlets. For example, supermarkets wherePepsi buys large shelf area and display areas so the customer can find them easier,Viz, Convenience stores, Restaurants, Movie theaters and almost and otherconceivable spots.Pepsi has a competitive advantage over Coke because of the image it portrays.Pepsi promotes itself as the choice of the “New Generation”. Pepsi gets thisadvantage by implementing such large marketing projects like “Project Globe”.This marketing plan, which Pepsi spent 637 million dollars over five years, is to 22
    • introduce the new rich deep blue coloring of its packaging. The rich deep bluecoloring represents eternal youthfulness and openness. Marketing plans like thismade Pepsi one of the coolest brands recognized among teens in the top five andthe only beverage product in this category.Another competitive advantage that Pepsi has is in their product Mountain Dew.Mountain Dew has grown a staggering 74.1% over the last five years. MountainDew has a 6.3% market share and has recently become the No.4 soft drink inAmerica. At this current pace Mountain Dew will be come the first non-cola toreach the 1billion gallon mark in one year.Pepsi also has an advantage as an innovator in their field. They are the first softdrink makers to introduce a new one-calorie soda called Pepsi-One with, justapproved by the FDA, Ace-K.This new sweetener is slated to be a break through for diet soda in which it limits 23
    • the after taste associated with diet soda and brings a more cola taste to theproduct. Pepsi has always been a strong No.2 against Coke and have become oneof the world’s largest Companies. As far as market share is concerned Pepsistands strong. 24
    • Here are just a few vitals of the International Market: OVERALL MARKET SHARE 1. COCA-COLA 43.9% 2. PEPSI COLA 30.9% 3. CADBURY SCHWEPPES 14.5% BREAKDOWN OF MARKET SHARE 1. COCA-COLA CLASSIC 20.6% 2. PEPSI COLA 14.5% 3. DIET COKE 8.5% 4. MOUNTAIN DEW 6.3% 5. SPRITE 6.2% 6. DIET PEPSI 5.9% 7. 7-UP 2.3% 8. CAFFIENE FREE DIET COKE 1.8% 25
    • 9. CAFFIENE FREE DIET PEPSI 1.0%10. DR. PEPPER 0.6%FOUNTAIN SALES(FOUNTAIN SALES ARE CREDITED FOR 27% OFSODA SALES)1. COCA-COLA 65%2. PEPSI COLA 23% 26
    • PEPSI-THE INDIAN EXPERIENCE• Pepsi is one of the most well known brands in the world today available in over160 countries. The company has an extremely positive outlook for India."Outside North America two of our largest and fastest growing businessesare in India and China, which include more than a third of the world’spopulation." (PepsiCo’s annual report, 1999)• This reflects that India holds a central position in Pepsi’s corporate strategy.India is a key market for PepsiCo, and at the same time the company has addedvalue to Indian agriculture and industry. PepsiCo entered India in 1989 and isconcentrating in three focus areas – Soft drink concentrate, Snack foods andVegetable and Food processing.• Faced with the existing policy framework at the time, the company entered the Indian market through a joint venture with Voltas and Punjab Agro Industries.With the introduction of the liberalization policies since 1991, Pepsi took 27
    • complete control of its operations. The government has approved more than US$ 400 million worth of investments of which over US$ 330 million have already flown in. • One of PepsiCo’s key strategies was to develop a completely local management team. Pepsi has 19 company owned factories while their Indian bottling partners own 21.The two advertisements tags: ‘yehi hai right choice baby’ and ‘nothing official about it’immediately ring a bell- it’s got to be Pepsi.The advertisement tag ‘yehi hai right choice baby’ was the first ‘Hinglish’ slogan everused in the in the Indian market. This slogan proved to be the best suited one for Pepsiand it was a mega hit and at that moment of time.Pepsi in a short span of its operations in India has found a place in the hearts and mindsof the Indian consumers. The success has primarily been due to the innovative and 28
    • passionate Indian team, which has been built over the years. Pepsi is a trendsettermanaged and run by Indians, where important decisions are taken locally.Pepsi started its operations in India in 1989 and since then PepsiCo has set up a fullyintegrated operation in India viz. Manufacturing, Research & Development, Marketing,Distribution and Franchising- covering fruit/vegetable processing, Exports, Snack Foods& Beverages. In the mean time Pizza Hut and Frito Lay’s are the examples in this regardonly.Pepsi has 40 bottling plants in India, out of which 16 are company owned and 24 areowned by Indian franchisees. One of the major player in franchisee is RKJ Group. The RKJ group is Indias leading supplier of retailer brand Carbonated andNon-Carbonated soft drinks, with beverage manufacturing facilities in India and Nepal.Its experience in the beverage industry dates back to the sixties when it had the firstfranchise at Agra. 29
    • It has the license to supply beverages in the territories of Western U.P., part of M.P., halfof Haryana, whole of Rajasthan, Goa, 3 districts of Maharashtra, 9 districts of Karnatakaand whole of Nepal. The group has in total 18 bottling plants in India & Nepal and isresponsible for producing and marketing 44% of Pepsi requirement in India.This group has brought name and fame to the Pepsi as in all this regions Pepsi is at thecommanding position and in the mean this group has diversified itself into ice cream,suiting and shirtings, restaurants, beer plant in Mauritius & edible oil plant in Sri Lanka. 30
    • PEPSI – BRANDS AND PACK PROFILEBRAND PACKS: The products are generally available in three kinds of packaging: • GLASS BOTTLES • DISPOSABLE CANS 31
    • • PET JARSFLAVOUR PACKS:COLA (Carbonated Soft Drink): • PEPSIORANGE: 32
    • • MIRANDA ORANGELEMON: • MOUNTAIN DEW • 7UPMANGO: 33
    • • SLICE MANGODRINKING SODA : • EVERVESS SODAMINERAL WATER: • AQUAFINACarbonated Soft Drinks (CSD) or Soft Drinks as they are popularly known is one of thelargest FMCG market in the whole world with the total annual sales of around $40billion. MARKET SHARE & BRAND AMBASODARS IN INDIA 34
    • One of the most visible battle fronts in Indias cola wars is celebrity endorsements, andPepsi and Coke have rolled out the biggest categories of celebrities in the country, filmstars and cricketers, signed up as brand ambassadors at humongous cost. Their well-known faces are splashed on billboards and newspaperpages, even as television spots roll out by the dozens featuring the stars. The Coke-Pepsirivalry is so intense that there is a fight to win ad space at every shop, bus-stop stall androadside eatery. Each transnational company marks out its territory in either bright red orblue, the colors associated with the two brands. The prize they strive for is large, andgrowing: Indias soft-drink market is estimated to be worth more than US$6 billion.Top film stars Kareena Kapoor, Shahrukh Khan, Aishwarya Rai, Amitabh Bachchan,Rani Mukherjee, Priyanka Chopra, Akshya Kumar, Aamir Khan and cricketers RahulDravid, Sachin Tendulkar, Virender Sehwag, Irfan Pathan and many more have beenoffered contracts that are sometimes worth more than their earnings from films or cricket.According to reports, Aamir Khans contract for Coca-Cola is worth more than $4 millionover three years. For that money, Aamir sets aside a few days every year for thecommercials. Shahrukh Khah, who rivals Aamir in the movies, charges a similar amountfor Pepsi, while among the ladies, Aishwarya Rai leads with more than $2 million.Coca-Cola is reported to have roped in the maximum number of 15 celebrities, followedby eight for Pepsi. Other brands such as Thums Up (Coca-Colas local brand) have three,while 7Up (a Pepsi brand) has Yana Gupta and, this year, the hot Mallika Sherawat.The health-drinks business is also witnessing plenty of churn, with the segment growingat a robust 20-25% in the past few years, compared with less than 8% for carbonateddrinks in the past couple of years. The non-carbonated beverage market is estimated to beworth more than $250 million (in urban areas). According to a recent ACNielsen study,among fruit juices, Daburs Real is the market leader with 60% share, followed by Pepsis 35
    • Tropicana (33%). In the fruit-based drinks category, Coca-Colas Maaza is the leader,followed by Parles Frooti and PepsiCos Slice. According to reports, Coca-Cola maysoon test-market its global fruit-juice brand Minute Maid, as the diet versions of the fizzydrinks have not taken off.Surprisingly, perhaps, one of the biggest beneficiaries of this growth is the Indian farmer,because of the integration of backward linkages by cola companies to purchase processedfruit. While Coca-Cola is working with farmers in Andhra Pradesh and Maharashtra,PepsiCo has tied up with Punjab Agri Export Corp, a state-owned enterprise, to cultivatecitrus fruits, particularly oranges, for its Tropicana brand.The expansion potential for this business is immense, given that India is the second-largest producer of fruit in the world, but only 4% is processed because of storage andyield problems. In Brazil and the United States, 70% of produce is processed, while 50%is in Israel and 83% in Malaysia. Structural changes in agriculture are imperative, asmore than 60% of Indias billion-plus population depend on farm produce for theirlivelihoods, while the contribution of the sector to gross domestic product is less than25%.As far as marketing is concerned, however, the real action is undoubtedly among thecarbonated drinks. Commercials costing more than $250,000 are shot overnight toconvey the right message. For example, the lemon-lime soft drink Sprite, a Coca-Colaproduct, released a spoof of a Pepsi campaign within an hour, while Pepsi hit back withina week with its takeoff on Cokes "Thande ka Tadka" commercials featuring Aamir.According to some reports, the fizzy drinks have splurged more than $10 million onadvertising campaigns in one month, though the companies deny such expenditures. It is 36
    • usual for cola companies to spend $2 million to $3 million for a new campaign. Threeyears back, a fierce price battle ensued when Coca-Cola India launched small 200-milliliter cans priced at Rs5 (11 cents). Pepsi responded by lowering the price of its300ml can from Rs8 to Rs6.The cola companies have reason to feel that the Indian market remains largely untapped.Indias per capita consumption of cola is quite low at 10 servings per year, whilePakistanis and Sri Lankans drink 25 and 30, respectively.The advertising strategies have changed over the years, moving on from print ads to TVcommercials to promotions at restaurants, events, the Internet, contests, and tie-ups withshops and movie theaters. Indias total advertising market (print plus TV) is more than$2.5 billion, with print ads accounting for 45% of the total.According to the Adex India Report, in terms of TV advertising the carbonated-soft-drinks category grew by 50% in 2005 over 2004, with the major share going to Pepsi.However, print advertising in 2005 dipped by 23% from 2004. Pepsi continued to be thehighest spender, followed by Thums Up, Coca-Cola, Diet Pepsi and Mirinda Lemon (aPepsiCo brand). On television as well, Pepsi is the highest spender, followed by Coca-Cola, Mountain Dew, Thums Up, 7Up, Mirinda Orange, Sprite, Diet Pepsi, Limca (Coca-Cola brand) and Mirinda Batman Blast. Thums Up was the largest spender in restaurants.While Pepsi has shown a preference for promotional commercials linked to sponsoredprograms, Coca-Cola has stuck more to pure ads. Online campaigns are picking up, too.For Pepsis Oye Bubbly promotion, Yahoo charged $25,000 for two days of onlineadvertising. 37
    • The cola brands have soldiered on despite charges by a prominent environmentalorganization, the Center of Science and Environment, that Pepsi and Coca-Cola sold inIndia contain pesticide residues in amounts 40-50 times the prescribed European Unionnorms, and assorted other controversies such as allegations of excessive levels ofcadmium in waste from a Coke factory. Any anti-cola story has a bandwagon effect, as itis politically correct in India to be anti-multinational-corporation and anti-American.In fact, the problem of pesticide contamination of foodstuffs is hardly limited to Pepsiand Coke: virtually everything that Indians eat and drink, from vegetables to eggs tomilk, carries undesirable chemicals at equal or greater concentrations, because ofuncontrolled use of fertilizer and pesticide by farmers.This problem will take decades to solve, but with Indias most beloved film starsendorsing carbonated drinks, keeping Indians off them may well be impossible.Coke still outsells Pepsi in almost all areas of the world. Saudi Arabia and the Canadianprovinces of Prince Edward Island, Newfoundland and Labrador, Ontario and Quebec aresome of the few exceptions.By most accounts, Coca-Cola was Indias leading soft drink until 1977 when it left Indiaafter a new government ordered the company to turn over its secret formula for Coca-Cola and dilute its stake in its Indian unit as required by the Foreign ExchangeRegulation Act (FERA). In 1988, Pepsi gained entry to India by creating a joint venturewith the Punjab government-owned Punjab Agro Industrial Corporation (PAIC) andVoltas India Limited. This joint venture marketed and sold Lehar Pepsi until 1991 whenthe use of foreign brands was allowed; Pepsi bought out its partners and ended the jointventure in 1994. In 1993, Coca-Cola returned in pursuance of Indias Liberalizationpolicy. In 2005, Coca-Cola and Pepsi together held 95% market share of soft-drink sales 38
    • in India. Coca-Cola Indias market share was 60.9%. Others claim that due to rumors ofthe use of cocaine, Coke was banned for a long time in India and recently the ban waslifted, however, Pepsi had maintained a commanding market share.According to Consumer Reports, in the 1970s, the rivalry continued to heat up themarket. Research proved that Pepsi is preferred over Coke. The way that they proved thiswas by blind taste tests that were conducted in stores. These tests were called "ChallengeBooths." The sales of Pepsi started to climb, and Pepsi kicked off the "Challenge" acrossthe nation.More importantly, Pepsi outsells its rival in grocery and convenience stores in the U.S.(regarded as an indicator of consumer preference), with Coca-Colas dominance inexclusive restaurant, movie theater, amusement park, college, and stadium deals givingCoke the overall sales advantage. In the U.S., Pepsis total market share was about 31.7percent in 2004, while Cokes was about 43.1 percent.In Russia, Pepsi once had a larger market share than Coca-Cola. However, Pepsisdominance in Russia was undercut as the Cold War ended. Pepsi had made a deal withthe Soviet Union for scale production of Pepsi in 1974. When the Soviet Union fell apart,Pepsi, was associated with the old Soviet system, and Coca Cola, just newly introducedto the Russian market in 1992, was associated with the new system. Thus, Coke rapidlycaptured a significant market share away from Pepsi that might otherwise have neededyears to build up. By July 2005, Coca-Cola enjoyed a market share of 19.4 percent,followed by Pepsi with 13 percent.According to Consumer Reports, the overall advertising of the two companies stillinvolve TV commercials that endorse the image of youth, beauty, family togetherness, 39
    • fun, pleasure, celebrity and patriotism. These components are expected to bring positivesto the company so that the rivalry will continue on. 40
    • PEPSI LOGOS(From 1906-1939) (From 1991-1998.)(From 1998-2006). (Pepsi Stuff represented a major assault in the Cola Wars) 9-PepsiCos History Timeline 41
    • 42
    • 43
    • Pepsi in IndiaBy most accounts, Pepsi gained entry to India in 1988 by creating a joint venture with thePunjab government-owned Punjab Agro Industrial Corporation (PAIC) and Voltas IndiaLimited. This joint venture marketed and sold Lehar Pepsi until 1991 when the use offoreign brands was allowed; Pepsi bought out its partners and ended the joint venture in1994. Others claim that firstly Pepsi was banned from import in India, in 1970, forhaving refused to release the list of its ingredients and in 1993, the ban was lifted, withPepsi arriving on the market shortly afterwards. These controversies are a reminder of"Indias sometimes acrimonious relationship with huge multinational companies." Indeed,some argue that Coke and Pepsi have "been major targets in part because they are well-known foreign companies that draw plenty of attention."In 2003, the Centre for Science and Environment (CSE), a non-governmentalorganization in New Delhi, said aerated waters produced by soft drinks manufacturers inIndia, including multinational giants PepsiCo and Coca-Cola, contained toxins includinglindane, DDT, malathion and chlorpyrifos — pesticides that can contribute to cancer, abreakdown of the immune system and cause birth defects. Tested products includedCoke, Pepsi, Seven Up, Mirinda, Fanta, Thumbs Up, Limca, Sprite. CSE found that theIndian-produced Pepsis soft drink products had 36 times the level of pesticide residuesPermitted under European Union regulations; Coca Colas 30 times. CSE said it hadtested the same products in the US and found no such residues. However, this was theEuropean standard for water, not for other drinks. No law bans the presence of pesticidesin drinks in India.Coca Cola and PepsiCo angrily denied allegations that their products manufactured inIndia contained toxin levels far above the norms permitted in the developed world. But an 44
    • Indian parliamentary committee, in 2004, backed up CSEs findings and a government-appointed committee is now trying to develop the worlds first pesticide standards for softdrinks. Coke and PepsiCo opposed the move, arguing that lab tests arent reliable enoughto detect minute traces of pesticides in complex drinks. On December 7, 2004, IndiasSupreme Court ruled that both Pepsi and competitor Coca-Cola must label all cans andbottles of the respective soft drinks with a consumer warning after tests showedunacceptable levels of residual pesticides.Both companies continue to maintain that their products meet all international safetystandards without yet implementing the Supreme Court ruling. As of2005, Coke and Pepsi together hold 95% market share of soft-drink sales in India.Pepsi has also been alleged to practice "water piracy" due to its role in exploitation ofground water resources resulting in scarcity of drinking water for the natives ofPudussery panchayat in the Palakkad districts in Kerala, India. Local residents have beenpressuring the government to close down the Pepsi unit in the village.Coca-Cola controlled the Indian market until 1977, when the Janata Party beat theCongress Party of then Prime Minister Indira Gandhi. To punish Coca-Colas principalbottler, a Congress Party stalwart and longtime Gandhi supporter, the Janata governmentdemanded that Coca-Cola transfer its syrup formula to an Indian subsidiary (Chakravarty,43). Coca-Cola backed and withdrew from the country. India, now left without bothCoca-Cola and Pepsi, became a protected market. In the meantime, Indias two largestsoft-drink producers have gotten rich and lazy while controlling 80% of the Indianmarket. These domestic producers have little incentive to expand their plants or developthe countrys potentially enormous market . Some analysts reason that the Indian marketmay be more lucrative than the Chinese market. India has 850 million potentialcustomers, 150 million of whom comprise the middle class, with disposable income tospend on cars, VCRs, and computers. The Indian middle class is growing at 10% per 45
    • year. To obtain the license for India, Pepsi had to export $5 of locally-made products forevery $1 of materials it imported, and it had to agree to help the Indian government toinitiate a second agricultural revolution. Pepsi has also had to take on Indian partners. Inthe end, all parties involved seem to come out ahead: Pepsi gains access to a potentiallyenormous market; Indian bottlers will get to serve a market that is expanding rapidlybecause of competition; and the Indian consumer benefits from the competition fromabroad and will pay lower prices. Even before the first bottle of Pepsi hit the shelves,local soft drink manufacturers increased the size of their bottles by 25% without raisingcosts.From Joint Venture to Fully-Owned Subsidiary :Pepsi is no longer a joint venture company with its Indian partners. Taking full advantageof liberalised policies, it has taken full control of Pepsi Foods. In 1994, Pepsi made aoffer to both Voltas and PAIC to buy their equity at attractive terms. Voltas sold all itsshares to Pepsi while PAIC, being a public enterprise, was forced to pull out and now itholds less than 1 percent of the total equity in Pepsi Foods Ltd. Instead of taking strictaction against Pepsi for not following its commitments, the Indian government has givenmore concessions to it in the post-liberalisation period. For instance, it has allowed Pepsito increase its turnover of beverages component to beyond 25 percent, and Pepsi is alsono longer restricted by its commitment to export 50 percent of its turnover. Recently thegovernment also allowed PepsiCo to set up a new company in India called PepsiCo IndiaHoldings Pvt.Ltd, a wholly owned subsidiary of PepsiCo International. Surprisingly, thenew company is also engaged in beverage manufacturing, bottling and exports activitiesas Pepsi Foods Ltd. All the new investments by the PepsiCo International have beenchannelised through this new venture. It now handles 28 bottling plants with a salesturnover of Rs 500 crores which is higher than Pepsi Foodss turnover of Rs.375 crore in1996. (The Financial Express, April 21, 1997). Although the financial performance of 46
    • both these companies in India has not been creditable so far, with total accumulatedlosses close to Rs.350 crore (except small surplus in 1996), yet it has been successful inachieving significant market share and brand royalty in India. The company in recentyears has not only bought over bottlers in different parts of India but also bought Dukes,a popular soft-drink brand in western India to consolidate its market share. It has alsoshrewdly consolidated its position through aggressive marketing and advertising in India.According to surveys conducted by many market research agencies, Pepsi now holdsover 40 percent share in Indian soft drink market. In 1995 alone, the companys beveragebusiness grew 50 percent, well ahead of the market which expanded by 20 percent.Another important recent shift in Pepsis marketing strategy has been its focus on Colaover other non-Cola brands. "We have single- mindedly focused on brand Pepsi" admitsRishi, Vice-President, Marketing, and Pepsi. (Business India, January 15-28, 1996). Atthe international level, PepsiCo International has been focusing more on India where theconsumption of soft drinks is expected to increase many-fold which is only three ouncesper person now as compared to 200 ounces in Europe and over 300 ounces in NorthAmerica. But, at the same time it is not realized that there is a vast difference between thepurchasing power of an average Indian and North American as it takes an Indian 1.5hours of work to be able to buy a bottle of Pepsi whereas for a North American, it takesless than 5 minutes. This experience of eight years clearly shows that Pepsi, totallypreoccupied with selling soft drinks in India, has broken promises. The responsibility ofimplementation of commitments cannot be left to Pepsi alone. One should expect thestate machinery to intervene and enforce these commitments on Pepsi. Surprisingly, thereis a total silence on the part of state machinery. 47
    • THE RKJ GROUP It can be said with absolute certainty that the RKJ Group has carved out a specialniche for itself. Their services touch different aspects of commercial and civilian domainslike those of Bottling, Food Chain and Education. Headed by Mr. R. K. Jaipuria, the groupas on today can lay claim to expertise and leadership in the fields of education, food andbeverages. The business of the company was started in 1991 with a tie-up with Pepsi Foods Limited to manufacture and market Pepsi brand of beverages in geographically pre- defined territories in which brand and technical support was provided by the Principals viz., Pepsi Foods Limited. The manufacturing facilities were restricted at Agra Plant only.Devyani Beverages Ltd. and Varun Beverages Ltd. are the flagship companies of thegroup. 48
    • The group also became the first franchisee for Yum Restaurants International [formerly PepsiCo Restaurants (India) Private Limited] in India. It has exclusive franchise rights for Northern & Eastern India. It has total 27 Pizza Hut Restaurants under its company. They have diversified into education by opening their first school in Lucknowunder the management of Delhi Public School Society. Companies are medium sized, professionally managed, unlisted and closely held between Indian Promoters and foreign collaborators. The group added another feather to its cap when the prestigious PepsiCo “International Bottler of the Year” award was presented to Mr. R. K. Jaipuria for the year 1998 at a glittering award ceremony at PepsiCo’s centennial year celebrations at Hawaii, USA. The award was presented by Mr. Donald M. 49
    • Kendall, founder of PepsiCo Inc. in the presence of Mr. George Bush, the 41stPresident of USA, Mr. Roger A. Enrico, Chairman of the Board & C.E.O.,PepsiCo Inc. and Mr. Craig Weatherup, President of Pepsi Cola Company. 50
    • MAJOR CREDENTIALS VARUN BEVERAGES LIMITED RECEIVED “GOLD STANDARD AWARD” FOR PRODUCTION & QUALITY CONTROL FOR THE YEAR 1996-1997. JAIPURIA GROUP WAS ADJUDGED “BEST BOTTLER” OUT OF MORE THAN 2000 BOTTLERS ALL OVER THE WORLD FOR THE YEAR 1996-97. 51
    • LOCATIONS OF BOTTLING PLANTS OF PEPSI IN INDIA 52
    • THE INDIAN BEVERAGE INDUSTRY Indian Beverages industry’s size is Rs.8000 crores and it is dominated by two players viz. Pepsi & Coke only. This high profile industry has lot of potential for growth as per capita consumption in India is 8 bottles a year as compared to 20 bottles in Sri Lanka, 14 in Pakistan, while 12 bottles a person in Nepal. The RKJ group is Indias leading supplier of retailer brand Carbonated and Non- Carbonated soft drinks, with beverage manufacturing facilities in India and Nepal.I its experience in the beverage industry dates back to the sixties when it had the first franchise at Agra. The group manufactures and markets Carbonated and Non-Carbonated Soft Drinks and Mineral Water under Pepsi brand. The various flavors and sub-brands are Pepsi, Mirinda Orange, Mirinda Lemon, Mountain Dew, 7UP, Slice Mango, Evervess Soda and Aquafina. It has the license to supply beverages in the territories of Western U.P., part of 53
    • M.P., half of Haryana, whole of Rajasthan, Goa, 3 districts of Maharashtra, 9districts of Karnataka and whole of Nepal. The group has in total 18 bottlingplants in India & Nepal and is responsible for producing and marketing 44% ofPepsi requirement in India. 54
    • OBJECTIVES OF THE PROJECTThe Project “Distribution Network & Market Share of PEPSI in Lucknow ”was designed on the lines of basic investment decisions to be taken by the seniorofficials of PEPSI for the purpose of amendments in the pre-existing distributionnetwork in order to review and strengthen the routes. The findings of the projectare very crucial for the increment of the market share of PEPSI in the NOIDABeverage Market.Though the process is an ongoing one but the decisions have to be taken on astrong base, supported by facts and figures and that too on papers. This supportcan only be provided with the help of an extensive and through analysis of themarket and the data collected thereof.The objectives of the project were delivered to us express sly by the MarketingDevelopment Coordinator who was the lead or the project head and we had to 55
    • submit the day report to him along with the draft report. He was the in charge ofthe project and gave guidelines and directions to approach the project. 56
    • The objectives of the project are:  To analyze, interpret and study the entire beverage market of NOIDA .  Comparative study of the various brands, packs and flavors available in the market.  Analysis of the strong and weak point of the competitors products and compare it with PEPSI.  To assess the reach and feasibility of the product and give the output for further investment for enhancing the distribution network along with assessing the efficiency of the current distribution system.  Assess the promotional measures in the context to the sales of PEPSI and focusing our study on the customer of company i.e., the retailers. As obvious that any company is concern with the increase in sales of its products, our project was in line with the companies’ objectives and all steps incorporate in 57
    • the project were directed to give an overview so as to attain its objectives. The market research conducted by us was in accordance to the company’s rules and policies which were quite material for the efficient and effective results and inferences to be drawn from the entire process. The market research was conducted in compliance of the given guidelines delivered to us expressly to achieve the given objectives, which were as under:1. Profitability2. Sales3. Market Share4. Improvement5. To satisfy the customers 58
    • THE MARKET RESEARCH PROCESSThe entire project was divided into five phases and each phase had its individualsignificance and supplemented each other. The process had to be started from thegrass root level and it was very important to understand the market for this FMCGproduct, which is very fast in production, distribution and consumption.The five phases into which the project was divided were: A. Route Riding B. Retail Tracking C. Corporate Tracking D. Analysis of finding and observations E. Segregating NOIDA for WAP and SAP F. Preparation of Draft Report 59
    • The entire process was more of a Descriptive Research type and incorporated aformal study of the specific problems faced by most FMCG companies anexploring the opportunities in the untapped market. The survey was conducted onthe basis of PEPSI product preference and evaluation of sales forecast in the newand underdeveloped market including the evaluation of the advertising andpromotional measures. The data collected had to be systematically arranged,analyzed and reported in a form congenial to take on the spot decisions.The observation approach was adopted in the process by gathering the dataessential and material for the decision-making and with clear objective ofincreasing the market share of PEPSI in the NOIDA market. Customerpreferences and satisfaction was also important in assessing the market share butthat was very clear that customers generally do not have loyalty towards theproduct in the Beverage industry rather what matters the most is the productavailability which will be discussed later. 60
    • All the phases mentioned above have been discussed along with the observations,problems, and other dimensions which have been encountered and experience indetail in the following pages. 61
    • A. ROUTE RIDING : The Beverage Industry or to be more specific, the Soft Drinks Industry has one of the most active network in term of its production, supply, distribution, marketing, consumption and also personal relations at the very second level of its distribution network. That is the reason why it is sometimes said to be “Very Fast Moving Consumer Goods”. Due to the above stated reason it becomes very essential to study and analyze the market of these products from the grass root level. So in the Soft Drinks Company as PEPSI, route riding becomes the first and foremost step in any of the activities to be undertaken be it any official so we were no exceptions. During the very initial days we were required to exercise Route Riding, the objective of which was:• To understand and analyze the market in its raw and basic form. 62
    • • To gain an in depth knowledge of the merchandising and processing activities of the Route Agents and understand the Beverage market.• To undertake the comparative study of the various brands and flavour packs of all existing beverages or soft drinks market and the market share and growth potential of each brand individually.• To develop innovative ideas to enhance the distribution system. Route Riding is basically accompanying Pepsi Vans along with the route agents and understanding the way they conduct merchandising activities right from the charged vans leave the depot to the entry of empty vans back to the depot. The Route Riding phase was for the initial ten days in which we had covered ten different routes.The Route Riding is a crucial phase because the actual dealing with the retailers andtheir dealing with the customers can be very efficiently understood through thisprocess which is important at all levels of decision making in the industry. 63
    • The Routes i.e., the Pepsi Vans were charged and left the depot by 7:30 in themorning, accompanied by the Route Agent (R.A.’s). The RA’s were given theroute planners and the particulars of the products, flavors, and quantities alongwith the billing materials. The vans had to cover the entire route and the RA hadto do the merchandising and sales against cash, which was a significant feature ofthis industry. The targets were given twice or thrice in a week that was achallenge for them and after achieving these targets the RA’s was awarded withsome special incentives. As there exists a player like Coca Cola. So it had a lot todo with schemes, discounts and other incentives.The routes were allocated on the basis of individual areas and the demand of theproduct in that particular area. The RA’s been responsible for the accomplishmentof their sales target on their routes and was given incentives on achieving thetargets. Not only this, the RA’s also had the responsibility of moving the flavors 64
    • and packs in proportion along with the proper display of the products for propervisibility and arrangement of products in brand order along with “VISI purity”.The RA’s had the responsibility of setting up Monopoly PEPSI Sales Counterswhere no products except that of PEPSI would be available amongst the softdrinks and especially of Coca Cola. These monopoly sales counters enjoyedspecial benefits in terms of discounts, schemes, VISI’s (fridges), display boards,glow signboards, wall paintings, banners, posters and other incentives.The RA’s had to achieve their sales target and surrender the daily sales proceedswith the concerned Customer Executives along with the route planner and billingmaterials and gate pass along with the details of sales on their route.The entire activities of the RA’s was controlled by the Customer Executives, whoalso assisted the RA’s in achieving their targets and were in charge of the salesperformance in their assigned areas. A Customer Executive had five to six RA’sunder him and was responsible for their performances as well. He was also 65
    • concerned with the promotional activities on his routes and handling of policy matters in the corporate regarding supply to industrial canteens and cafeterias. We as summer trainees were required to study and analyze the activities of the RA’s and be familiar with the market. We had been provided Market Analysis Sheets by the MDC in which we were required to record the observations of the retail outlets on a particular route.The observations, which were required to be recorded in, were: • The quantity of the cold and warm stocks of all brands and flavors available at the outlet along with the outlet details. • Inquiring about the satisfaction of the retailers in terms of sales of PEPSI products, schemes, discounts, combo offers, and the benefits of promotional activities. 66
    • • Inquiring about the satisfaction by the current distribution network in context to product availability of all flavors packs or individual flavors according to demandof customers, rates billings.• Inquiring about the behavior and merchandising of RA’s in accordance with the companies’ regulations and record complaints against RA’s, company or products, if any.• Inquire about the performance of various brands and flavors packs andcustomer’s response to those brands or flavors and also to educate the retailersaboutvarious schemes and incentives to increase sales volume.• Last but not the least, assessment of the effectiveness of, assessment of the effectiveness of promotional materials and activities like, display boards, glow signs, signage, wall paintings, posters, banners, racks, shelves, counters, VISI’s, and also impact of nation wide advertising on brand loyalty by the customers. 67
    • The information so collected was required to be filled in the Market AnalysisSheet (specimen on the next page) and reported to the MDC along with otherinformation in order of their seriousness. 68
    • B. RETAIL MAPPING OF NOIDAThe Retail Mapping is the integral part of the project and the most crucial istaking significant decisions regarding the enhancement of the distribution network involving heavy investment on account of increasing the routes and starting newroutes and promotional measures on those routes to increase its market share inNOIDA . The new routes, exploring new markets required the decision to be supportedwith facts and figures which had to be provided by the summer trainees on the basis ofthe survey conducted in the market and processed data thereof. The retail mapping had to be conducted on the basis of the Retail Tracking Sheet(RTS), which had been developed by the Marketing Development Coordinator andCustomer Executives of the NOIDA. unit which incorporated the retail outlets, theiraddresses, proprietor, respondent etc and served as a vital database for all market sincethen for PEPSI in NOIDA and had to be incorporated in the project in accordance tothe companies policies. 69
    • Objectives of Retail Mapping: • Segregating entire NOIDA for Strong Area Programme and Weak Area Programme i.e., SAP and WAP. • Assessment of retailer’s performance. • Assessment of the level of promotional measures required for increasing market share of PEPSI. • Collection of required information for making investment decisions for the enhancement of existing routes and opportunities for new routes in existing market as well as exploring new market. • Classification of all retail outlets in NOIDA into five broad categories viz, On Route, Non Existence, Non Potential, Reachable and Non Reachable under the head, Potential Retail Outlets. The Retail Tracking Sheet comprised of a total list of 1800 outlets. A team of six summer trainees were assigned for the project and approximately 300 outlets had 70
    • to be covered by each trainee. The duration for the completion of the Retailmapping took duration of 20 days. The entire survey was guided and directed bythe Customer Executive and Daily report had to be presented to him afterassessment and analysis along with other findings and observations. The Data hadto be classified in a systematic manner and presented in a predefined format,which was further reviewed by the Marketing Development Coordinator.The Retail Mapping process incorporated of including of new outlets, which havebeen omitted or newly opened, and the product availability on all these outlets.The major thrust was on segregating the market for Strong Area Programme andWeak Area Programme.The Strong Area refers to the routes on which the sales targets are met withoutmuch effort and have continuous demand for the products. These areas areperforming to the standards and are contented with the level of promotion 71
    • schemes and other sales boosting measures. The marketing efforts are nominal inthese areas because of the surplus demand and the area of concern is only toensure the proper and efficient supply of the products to meet the demand. In theNOIDA market approximately 32% of the market can be said to be strong areasand these areas include the well-developed markets as shopping malls, movietheatres, convenios, hotels, restaurants and bars etc. For these Strong areas, SAPonly aims at maintaining the performance of the product and enhancing the salesvolume. It is not the area of serious concern for the company.On the contrary the Weak Area refers to those areas or routes, which are criticallylow in sales and the targets, are tough to achieve and require aggressive marketingsupport. The demand in these areas is fluctuating or rather feeble. The routes arethe area of concern for the company as the demand is very low due to manyreasons and the major one is the existence of the player like Coca Cola in themarket. Other reasons could be poor distribution network, inadequate availability 72
    • of the products on the outlet, inadequate promotional measures and marketing support, undeveloped market as that of the interiors etc. These weak areas had to be identified and the cause of their inferior performance had to be traced through the Retail Mapping and the company had to be provided with the facts and figures to take legitimate measure on the basis of the findings of the deficient performance of the product in these areas. This involved the aggressive marketing strategy and heavy investment decisions to strengthen these markets. For this purpose the classification of the outlets into five categories was very crucial along with the other findings and observations discussed later. These five heads of classification have been discussed as under. ON ROUTE : It refers to the retail outlets, which are covered by the Route Agents and visited daily for sales and merchandising. The outlet is visited daily and actively involved in the sales of all brands and flavor packs of PEPSI. 73
    •  NON EXISTENCE: It refers to the outlets which were merchandising the product are no more in existence, i.e., they have diversified their business activity or have closed. NON POTENTIAL: It refers to those outlets, which are in existence but have very low potential in terms of sales or are not keenly interested in merchandising the products of soft drink. A careful assessment had to be done in case of Non Potential outlets, as they would turn to be potential in near future. It was also the area of operation of project to motivate these Non Potential outlets to undertake the merchandising of PEPSI. 74
    •  POTENTIAL OUTLETS : It refers to those outlets, which have the potential for the merchandising of PEPSI and have the required investment capabilities and can be the profitable Point Of Purchase of PEPSI by the customers. There were cases in case of these potential outlets, which were already merchandising PEPSI, and those, which did not, dealt with beverage products. The possibilities of setting monopoly counter were very fair at these outlets and were given special attention. The Potential outlets had to be further classified in two heads as below: o REACHABLE POTENTIAL OUTLETS : It refers to those Potential outlet which are reachable i.e., the products can be made available with the PEPSI vans. The reachability decision had to be taken in context to the accessibility of the vans at these outlets. 75
    • o NON REACHABLE POTENTIAL OUTLETS : It refers to those Potential outlets which are not accessible by the PEPSI vans. These outlets had to be considered because the sales volume can be increased at these outlets and so alternative method of distribution and promotional activities have to be evaluated and worked upon. 76
    • C. CORPORATE MAPPING : NOIDA being an entirely industrial city had huge potential for the sales of PEPSI in corporate as these concerns had factories, offices and canteens and the officials and workers base was very strong. The process of Retail Mapping was followed by the Corporate Mapping, which incorporated of tracing of the organizations and assessing the market for PEPSI in these areas. Apart from these the database had to be updated to turn the non-potential market in the corporate into profitable liaisons for the increment of sales volume.The objectives of Corporate Mapping were:  Trace the organizations with and without canteens and cafeterias and estimate the market for PEPSI.  Estimate the brand preference of PEPSI and COKE in the corporates and the reasons thereof. 77
    •  To review the product performance and satisfaction along with the expectations of the customers in corporates including PEPSI Dispenser Equipments. To assess the product availability and demand of the product (Traffic) in these organizations as well as when the product has the optimum consumption e.g. daily, delegations, meetings, parties, or other occasions and the customers i.e.,whether the officials or workers or both. To ensure efficient supply and record any complaints or grievances thereof. To assess the promotional measures being adopted by Coca Cola for tapping these markets and locate the weak points in corporates having Coca Cola counters to convert them into profitable opportunities.The Corporate Mapping was the supplementary programme in the project to boostthe sales performance of PEPSI in NOIDA and capture the market share of itsnearest competitor. The analysis and findings were recorded on the format 78
    • provide by the company accompanied by the list of findings and observations inorder or their preference and seriousness along with all the relevant details aboutthe organization. The matters were discussed and analyzed carefully by the MDC.The corporate matters had to be given a special care as these had huge potentialfor the product. The specimen copy of the Corporate Mapping format is attachedfor reference. The findings and observations have been discussed in the comingpages. 79
    • D. ANALYSIS OF FINDINGS AND OBSERVATIONS: The main objective of the company is to increase the brand preference and marketshare so any information material form this point of view had to be take into accountalong with the formats provided by the company for predefined information recordingand analysis of those recordings and present the information in an organize andsystematic manner in a condensed form reflecting the actual position of the market. The information had to be recorded in the format along with the relevantinformation as per the objectives of the research and an analysis of that information hadto be made and present them in an understandable format so that immediate inferencescan be drawn. Generally those information had to be presented in percentages and theother findings and observations had to be evaluated and a list of findings had to bearranged in order of their seriousness and areas of serious concern along with the outletdetails. 80
    • After the analysis sheets and formats have been surrendered to the C.E’s afteranalysis by the trainees it was further analyzed and evaluate by him and a brief analysiswas made each day of the daily report. The CE’s further forwarded these reports afterretaining the reference copy, to MDC for further review and reference. 81
    • E. SEGREGATION OF NOIDA FOR SAP AND WAP : As discussed earlier that the major objective of the Retail Mapping of NOIDAwas to segregate the market for PEPSI for the Strong Area Programme and the WeakArea Programme. These Programmes have been discussed under the Retail MappingHead. The Data and fact collected by the survey had to be analyzed and presented in asystematic form in order to draw meaningful inferences. The finding of the Route Riding and the Survey conducted during the RetailMapping and the Corporate Mapping were combined together and analyzed together toreach a final report ie, the RETAIL MAPPING SUMMARY or THE CONDENSEDDRAFT REPORT, which gave the entire picture of the actual position if PEPSI inNOIDA . The report so prepared was on the basis of the Retail Tracking Sheet and theother supplementary finding and observations were considered to reach a consensus ofdeclaring the route as a weak area or a strong area. 82
    • The reports were analyzed thoroughly by the MDC and the Customer Executivesand a meeting was held for the assessment of the routes and the reasons of unfavorableperformance in the weak areas and how to improve the sales on those routes. Thediscussion comprised of the further investments for the enhancement and extension of theroutes and the level of promotional measures required in these areas. The performance ofCoca Cola was also reviewed simultaneously and a comparative study was made toassess the performance and growth in the industry. These data and figures were comparedwith that of the last year and a growth percentage was reached which also served as abasis of declaring an area as a Weak Area.As already mentioned PEPSI is a VFMCG so the marketing strategies are going to bevery dynamic in nature. The Customer Executives had to formulae day to day strategiesand these were communicated to RA’s in the morning when they were going to leave thedepot and this interaction among R.A.and C.E. was to be known as Gate Meeting. 83
    • The programmes were to be based on the seriousness of the problems andaccordingly a mild or aggressive marketing, promotional and investment programme wasto be formulated. 84
    • F. PREPARATION OF DRAFT REPORTThe survey in its broad purview comprised of clearly classifying the entire retail outletsinto five different categories and exploring the new outlets. These figures of the RetailTracking Sheet and independent observations were systematically tabulated andpresented in a form to draw immediate inferences.The final and complete RETAIL MAPPING SUMMARY or THE CONDENSEDDRAFT REPORT (CDR) of the 1800, which had been covered by the team of sixsummer trainees, has been attached to the project on the next page. This Draft Report wassurrendered to the MDC for developing the plan of action and the formulation of Weakand Strong Area programmes. The CDR gives the clear picture of the factual position of the retail outletsaccording to the routes. The CDR had been prepared by the combined efforts of the teamand incorporates the findings of each member of the team. 85
    • The figures in the CDR were complete in themselves for the purpose of taking theinstant decisions for increasing, diversifying or ending the route. The most importanthead in the CDR was the Actual outlet. The CDR was supplemented by the list offindings and observations, which were the curriculum of survey of each route andpresented the information in order of their seriousness on a particular. Both these CDRand the list of findings served as themost efficient base to take decisions in direction to strengthen the position of PEPSI inNOIDA. . 86
    • Explanation of the RETAIL MAPPING SUMMARY or the CDR: RTS: It comprises the shops in the Retail Tracking Sheet, ACTUALS: It refers to those outlets, which were actually in existence, and it is not concerned with the RTS list. It comprises of the shops in operation and whether they have or not been included in the RTS list. SAME ACCOUNT: It refers to those outlets which were common to the RTS list and the Actual outlets surveyed. Simply it comprises the intersection of the RTS and the actual outlets. It was required to assess and verify the reliability and up gradation of the company’s most valuable database i.e., the Retail Tracking List. 87
    • Rests of the heads have been discussed in detail under the head, Retail MappingProcess discussed previously. 88
    • Presentation Of DataThrough Questionnaire, I got large amount of data, now I am describing that data withthe help of suitable diagrams in summarized way.I have taken sample of 200 peoples/outlets in NOIDA area and conduct a surveyfor them, to find out the accurate figures of market share of PEPSI and distributionservice in NOIDA . After this study we can easily analyze that what the presentposition of Pepsi in NOIDA market and what are the strengths and weakness . 89
    • W hIch brand s ell sho pkeeperPEPSI COKE 6% 4% COKE 4% BOTH 90% PEPSI 6% BOTH 90 % 90
    • PREFERENCE AMONG PEPSI AND COKE COKE 45%PEPSI 55% 91
    • WhIch pack sells more 2 LT 300 ML 500 ML17% 30% 200 ML 6% 300 ML 500 ML 2 LT 200 ML 47% 92
    • PREFERENCE OF FLAVOURS60%50%40%30%20%10% 0% COLA ORANGE LIME N MANGO LEMON 93
    • Satisf actio n f ro m distributio n s e r v i ce 15% NO 15% NO 85%YES85%YES 94
    • Mode of paymentDebIt Cheque 2 % 3 % Cheque Cash Debit Cash 9 5 % 95
    • Packs in which sells Pepsi and coke2 l t r. 2 0 0 ml 2 % 3 % 2 0 0 ml 3 % All 95% 2 ltr. 2% All 95 % 96
    • FINDINGS AND OBSERVATION The reports of each phase of the project had to be supplemented by theinformation, data, facts and figures and significant findings and observation to supportthe feasibility of decisions to be taken on the basis of the Retail mapping Summary or theCDR. The information so recorded in each phases of the project had to be listed in orderof their relevance and seriousness and presented in a form to facilitate immediateinference. Some of the important observations have been listed below: Soft drink business’s behavior is not governed by brand loyalty so the availability of the right brand, at the right place, at the right time is the key for winning consumer in soft drink business. The most important and satisfying observation was that, PEPSI had approximately 64% market share in the soft drinks market in NOIDA and some of its brands like 97
    • Mirinda Orange and Mountain Dew were performing above standards apart from PEPSI Cola in spite of the Coca Cola with two cola flavor packs i.e., Coke andThumps up. The present distribution system of PEPSI is the best in the entire FMCG industry in Lucknow and the major strength of PEPSI. The enhancement in the distribution network would definitely increase the market share of PEPSI. The retailers played a very critical role in the increment in the sales volume of the product and the had to be kept satisfied in order to increase the market share by offering better schemes, discounts, display materials such as VISI’s, racks, counter, signage, wall paintings and better amount for purchase of shelf space for display. The existence of sub-dealers and super stockiest are also the major area of problem, as they do not move the schemes and other display materials and incentives information to the retailers, which is one of the reasons for the dissatisfaction of retailers. 98
    •  The cut throat competition between PEPSI and COKE had lead to the never ending cola war and price war which has brought down the profit margins which is one ofthe major grievances apart from the common complains pertaining to schemes, incentives and display materials. The other major issue was the supply of PEPSI from the bottling plants in Delhi and Punjab against the company policies. These plants supplied the products at discounted rates and violated merchandising principles of PEPSI. Another critical issue was the presence of duplicate products of PEPSI in the market. The details of these outlets have been surrendered to the company for action against these outlets. The position of PEPSI in the corporates was not up to the mark and Coca Cola had a better scene in this context. One of the reasons can be assigned to the product positioning of PEPSI and Coca Cola. 99
    • RECOMMENDATIONSThe Project Retail Mapping was concerned only with providing the organizationwith all the necessary information required to strengthen the position of PEPSI inNOIDA in the form of reports incorporating all information in an analyzed andsummarized form. But some critical and major issues, which have been identified onaccount of extensive analysis, required suggestions to be put forward on the basis of thecurrent market scenario. Few suggestions, which were put forward to the MDC, havebeen listed below. There should be uniformity in prices, schemes, and discounts, which are offered to retailers and should be based on a specific parameter such as sales volume, to avoid dissatisfaction and biasness among the retailers. Activities of sub dealers and super stockiest should be controlled and checked in order to ensure fair prices and distribution of schemes and incentives to small retailers to avoid discontent among smallholdings and outlets. 100
    •  Every possible step should be taken for the satisfaction of the retailers, as they are the most important supplement to the sales promotion measures and nationwide advertising campaigns of the company in context of boosting the sales and enhancement of the brand image of PEPSI. Strict actions should be taken against the organization producing duplicate PEPSI and sued. Measures should be taken to educate the customer about the existence of duplicate Pepsi. The operations of the bottling plants of the surrounding territories should be controlled in order to ensure that they do not supply the product in other territories not under their area of operation. The company should modify its advertising strategy and educate the customers about its age-old existence and enhance its brand image. This will appeal to the target customers of middle and older age groups apart from the younger generation in which PEPSI has a good hold. 101
    • CONCLUSIONThe business of Soft Drink industry is significantly based upon the impulsebuying, so it is very necessary to Merchandise products of PEPSI efficiently andpresent them in such a manner so that it can motivate the consumer and generate athirst in consumer to consummate it.Though, PEPSI has a strong position in Lucknow with the support of itsefficient distribution network, aggressive marketing efforts and advertisementsalong withattractive schemes but there still exists potential market in NOIDA to beexploited and a suitable Weak Area Programme or the Strong Area Programmehas to be formulated to improve its market share depending upon the area underconsideration.Soft drink business’s behavior is not governed by brand loyalty so the emphasis isnot only on creating the market but also on retaining it. The availability of the 102
    • right brand and flavor pack, at the right place, at the right time is a key forwinning the customer in soft drink business. Keeping these facts in mind itbecomes very important to treat the retailers with concern and satisfy them byvarious measures and so that they are loyal towards PEPSI. Public relation is alsocritically important in this industry. 103
    • BIBLIOGROPHY1. Research Methodology……….. C.R.Kothary2. Marketing Management………. Philip Kotler3. Statistical methods……………. S.P.Gupta4. www.pepsi.com5. www.pepsiworld.com 104