Opportunities associated with the emerging channels in CocaCola beverages


Published on

Findings are limited to Bhubaneswar market.

1 Like
  • Be the first to comment

No Downloads
Total Views
On Slideshare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Opportunities associated with the emerging channels in CocaCola beverages

  1. 1. Hindustan CocaCola Beverages Private Limited [Pick the date] 2013 Summer Internship Project Report SHILPA SOMILA POST GRADUATE DIPLOMA IN MANAGEMENT (PGDM)
  2. 2. 1 Summer Internship Project (SIP) Report On “OPPORTUNITIES ASSOCIATED WITH THE EMERGING CHANNELS IN COCACOLA BEVERAGES” ACADEMIC SESSION 2012-14 Under the guidance of: Faculty Guide: Company Guide:
  3. 3. 2 CERTIFICATE This is to certify that the project report entitled“OPPORTUNITIES ASSOCIATED WITH THE EMERGING CHANNELS IN COCACOLA BEVERAGES”is an authentic piece of work carried out by Miss. ShilpaSomila and submitted in the partial fulfillment of the requirements for the award of the degree Post Graduate Diploma in Management ( PGDM ). This project has been carried out under my guidance and supervision.
  4. 4. 3 DECLARATION I hereby certify that: 1. The project report entitled “OPPORTUNITIES ASSOCIATED WITH THE EMERGING CHANNELS IN COCACOLA BEVERAGES” is an authentic piece of work and has been submitted in the partial fulfillment of the requirements for the PGDM course. 2. This report is completely based on the Summer Internship carried out under Hindustan Coca Cola Beverages Private Limited (HCCBPL). 3. This report has not been submitted for the award of any other degree, apart from PGDM, elsewhere partially or fully. 4. I have followed the guidelines issued by ..……in preparing this report. 5. Whatever data sources I have used from various sources, I have given due credit by citing those in the text of this report and giving the details in the BIBLIOGRAPHY.
  5. 5. 4 ACKNOWLEDGEMENT The works of some unknown persons make our lives easy in various aspects. I believe, it is appropriate to acknowledge all these unknown persons who`ve shaped or impacted our lives to a great deal; equally it is crucial to acknowledge all those known souls who have directly shaped our life & work. I take this opportunity to express deep regards to my Faculty Guide, for his guidance, monitoring and constant encouragement throughout the course of my SIP. I extend my gratitude to my Company GuideHindustan Coca Cola Beverages Private Limited, for his cordial support, valuable information and guidance, which helped me in completing this project report. I thank my Institution, for being the constant driving force, enabling me to put into practice, the theoretical knowledge I acquired throughout my 1st year by means of this much valued SIP. Last but not the least, I take this as an opportunity to thank The Almighty, My parents, teachers who have always been by my side. And not to disremember the respondents, I express my heartfelt gratitude to all those persons who contributed their precious time in responding to my questionnaire.
  6. 6. 5 PROLUSION Branded cold drinks are always in vogue courtesy the brand name, brand loyality, the flavour or the refreshment associated as the consumers site. The reasons can be multiple. Whenever one is rewarded with the opportunity to analyse the beverage industry closely & suggest the required modifications, taking into consideration any specific objective, the task consumes time and energy no doubt, however the results obtained when benefit the organization for which the survey has been carried out, means a lot not only to the organization but also to the researcher. Learning through practical exposure thus comes into play. The Post Graduate Diploma in Management (PGDM) curriculum has been devised in such a manner that an educatee can heighten his/her theoritical knowledge base courtesy the subjects: Marketing, Finance, Human Resource Mangement, Operations Research, to quote a few. The cream of PGDM`s the practical exposure one gets in interaction with the Corporate world. Business Schools have realised the importance of the practical knowledge over the theoritical knowledge base. This Research Report is mandatory for the partial fulfilment of the PGDM curriculum. It provides a mangement student a fantabulous opportunity to understand the industry by analysing & interpreting practical problems through the application of management theories & techniques. It is a novel platform of acquisition through practical exposure, which incorporates data collection, an exhaustiveanalysis & interpretation of results. It provides the apprentice a golden opportunity to correlate the theory with practice, to test the cogency &applicability of his/her classroom learning with real life business situations.
  7. 7. 6 EXECUTIVE SUMMARY Produced by The CocaCola Company of Atlanta, Georgia, and is often referred to simply as Coke (a registered trademark of The Coca-Cola Company in the United States since March 27, 1944), CocaCola was originally intended as a patent medicine when it was invented in the late 19th century by John Pemberton Coca-Cola was bought out by businessman Asa Griggs Candler, whose marketing tactics led Coke to its dominance of the world soft-drink market throughout the 20th century. The company produces concentrate, which is then sold to licensed CocaCola bottlers throughout the world. The bottlers, who hold territorially exclusive contracts with the company, produce finished product in cans and bottles from the concentrate in combination with filtered water and sweeteners. The bottlers then sell, distribute and merchandise CocaCola to retail stores and vending machines. The CocaCola Company also sells concentrate for soda fountains to major restaurants and food service distributors. It wasn't until 1955 that CocaCola beverage offerings started to expand when a bottler in Italy started selling Fanta® Orange. From that point on, the Company began adding a wider variety of beverage selections and portion sizes for consumers. The CocaCola Company believes in offering an assortment of beverages for every lifestyle, life stage and life occasion. Today, over 500 beverage brands are sold in more than 200 countries. This amounts to 3,500 beverages in numerous categories, such as regular, low- and no-calorie sparkling beverages; fruit juices and fruit drinks; bottled water; sports and energy drinks and ready-to-drink teas and coffee. This project report is merely an attempt to explore the opportunities associated with CocaCola beverages in Bhubaneswar market.For fulfilling the purpose, data was collected from the targeted sectors, analyzed & finally interpreted. This research was more of a learning experience of its kind. Interviewing the respondents was not that easy, however surpassing all the limitations, I learnt that the opportunities for growth are plenty for the beverage industry CocaCola.
  8. 8. 7 It was an excellent opportunity to work as an intern for Hindustan CocaCola Beverages Private Limited, Bhubaneswar, utilizing my knowledge in Marketing as well as the guidance provided by my esteemed guides.
  9. 9. 8 TABLE OF CONTENTS Chapter 1 2 3 4 5 Particulars Introduction 1.1 A brief insight into the FMCG industry in India 1.2 A brief insight into the beverage industry in India 1.3 The concept of fruit juices and mineral water The Coca Cola Company 2.1 History 2.2 Manifesto for growth 2.2.1 Mission 2.2.2 Vision 2.2.3 2020 Vision & commitment 2.2.4 Values of the company 2.3 Soft drink market in India, 2013 2.4 CocaCola in India 2.5 SWOT analysis of CocaCola 2.6 Porter`s five forces analysis of Coca Cola 2.7 PEST analysis 2013 2.8 Strategies 2.9 VRIO 2.10 Competitors of CocaCola 2.11 Distribution routes 2.12 Distribution system 2.13 Distribution system at HCCBPL, Bhubaneswar CocaCola products 3.1 Packaging details of CocaCola products Conceptual background 4.1 The concepts associated with the project Introduction to the study 5.1 Problem of the study Page number 13 16 20 22 28 28 28 29 30 32 34 36 40 45 46 46 49 50 51 52 55 59 71
  10. 10. 9 6 7 8 5.2 Review of literature 5.3 correlation to the concept of marketing mix 5.4 Objectives of the study 5.5Scope of the study 5.6 Significance of the study 5.7 Limitations of the study 5.8 Research Methodology All about the project 6.1 The project Data analysis and interpretation 7.1 Bar graphs, pie charts, dough nuts 7.2 Cross tabulations 7.3 Findings Recommendations/suggestions and conclusion 8.1 Recommendations to the company 8.2 Conclusion Bibliography Annexure Annexure-1 Questionnaire Annexure-2 Data collection tables Annexure-3 Soft drink terminologies 71 82 85 85 86 87 88 92 94 124 141 144 149 151 153 157 161
  11. 11. 10 LIST OF FIGURES Figure Page no. Figure 1 Figure 2 Figure 3 Figure 4 Figure 5 Figure 6 Figure 7 Figure 8 Figure 9 Figure 10 Figure 11 Figure 12 17 21 23 52 60 63 64 67 68 69 80 81 LIST OF TABLES Table Table 1 Table 2 Table 3 Table 4 Page no. 22 26 159 159
  12. 12. 11 CHAPTER 1
  13. 13. 12 INTRODUCTION Coca Cola is the world`s leading manufacturer, marketer & distributor of the nonalcoholic beverage concentrates & syrups, used to produce nearly 400 beverage brands. It sells beverage concentrates & syrups to bottling & canning operators, distributors, fountain retailers & fountain whole sellers. The company`s beverage products comprise of bottle& canned soft drinks as well as soft concentrates & syrups. In addition to this, it produces & markets sports drinks, tea & coffee. The CocaCola Company& its network of bottlers comprise of the most sophisticated & pervasive production & distribution system in the world. This unique system has made the company the world`s premier soft drink enterprise. The company works to deliver satisfaction & value to consumers through a worldwide system of superior brands & services, thus increasing brand equity on a global basis.
  14. 14. 13 A BRIEF INSIGHT: THE FMCG INDUSTRY IN INDIA Fast Moving Consumer Goods (FMCG) goods are popularly named as consumer packaged goods. Items in this category include all consumables (other than groceries/pulses) people buy at regular intervals. The most common in the list are toilet soaps, detergents, shampoos, toothpaste, shaving products, shoe polish, packaged foodstuff, and household accessories and extends to certain electronic goods. These items are meant for daily of frequent consumption and have a high return. The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.1 billion. It has a strong MNC presence and is characterized by a wellestablished distribution network, intense competition between the organized and unorganized segments and low operational cost. Availability of key raw materials, cheap labor costs and presence across the entire value chain gives India a competitive advantage. The FMCG market is set to treble to billion to US$ 33.4 billion in 2015. Penetration level as well as per capita consumption in most product categories like jams, toothpaste, skin care, hair wash etc. in India is low indicating the untapped market potential. Burgeoning Indian population, particularly the middle class and the rural segments, presents an opportunity to makers of branded products to convert consumers to branded products. 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
  15. 15. 14 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. The FMCG sector 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. The FMCG sector consists of the following categories:  Personal Care- Oral care, Hair care, Wash (Soaps), Cosmetics and Toiletries  Branded and Packaged foods and beverages- Deodorants and Perfumes, Paper products (Tissues, Diapers, Sanitary products) and Shoe care; the major players being; Hindustan Lever Limited, Godrej Soaps, Colgate, Marico, Dabur and Procter & Gamble.  Household Care- Fabric wash (Laundry soaps and synthetic detergents), Household cleaners (Dish/Utensil/Floor/Toilet cleaners), Air fresheners, Insecticides and Mosquito repellants, Metal polish and Furniture polish; the major players being; Hindustan Lever Limited, Nirma.  Health beverages, Soft drinks, Staples/Cereals, Bakery products (Biscuits, Breads, Cakes), Snack foods, Chocolates, Ice creams, Tea, Coffee, Processed fruits, Processed vegetables, Processed meat, Branded flour, Bottled water, Branded rice, Branded sugar,
  16. 16. 15  Juices- The major players being Coca-Cola, Pepsi, Dabur, Parle Agro  Spirits and Tobacco-The major players being; ITC, Godfrey.
  17. 17. 16 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. The beverage industry in India occupies USD 230 million market in the USD 65 billion food processing industry. Coca cola, Pepsi, and Nestle are the leading beverage brands that have been ruling the Indian beverage market since past few decades. Among all the beverages, tea and coffee are manufactured as well as exported heavily in the international markets succumbing to the individual demands around the world.
  18. 18. 17 Figure 1: Classification of beverages 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
  19. 19. 18  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 behavioral 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.
  20. 20. 19  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.
  21. 21. 20 THE CONCEPT OF FRUIT JUICES & MINERAL WATER The cold drinks are always in vogue in a country like India, especially the cola flavored drinks. Thousands of bottles of cold drinks are gulped down every summer. But of late, with health issues on top of mind, many consumers are picking up water, juices & non-carbonated drinks instead. With their figures strongly on the consumer pulse, the cola majors are keeping pace & stepping up focus on non- carbonated drinks and juices to quench the thirst of their health conscious clientele. The market of non-carbonated drinks is growing by leaps & bounds. It`s not that the consumers have rejected the cola drinks, instead their area of focus has shifted to the health issues & they have realized the need of nutritional interventions which has led to an increase in the sales of non- carbonated drinks, mineral water & fruit juices. Water provides an apt opportunity for hydration with nutrition. Almost every national beverage player has a water variant & organized brands like Himalaya, Bisleri, Kinley, Aquafina vie with thousands of local players for a slice of the market. The major players in the juice market are Real & Tropicana, to name a few. (Article titled “ Indiathinks healthy, drinks healthy “http://newindianexpress.com/, May 2013)
  22. 22. 21 CHAPTER 2
  23. 23. 22 THE COCA COLA COMPANY HISTORY 1886-92 Like many people who change history, John Pemberton, an Atlanta pharmacist, was inspired by simple curiosity. One afternoon, he stirred up a fragrant, caramel-colored liquid and, when it was done, he carried it a few doors down to Jacobs' Pharmacy. Here, the mixture was combined with carbonated water and sampled by customers who all agreed -- this new drink was something special. So Jacobs' Pharmacy put it on sale for five cents a glass. Pemberton's bookkeeper, Frank Robinson, named the mixture Coca-Cola®, and wrote it out in his distinct script. To this day, CocaCola is written the same way. In the first year, Pemberton sold just 9 glasses of CocaCola a day. A century later, The Coca-Cola Company produced more than 10 billion gallons of syrup. Unfortunately for Pemberton, he died in 1888 without realizing the success of the beverage he had created. Over the course of three years, 1888-1891, Atlanta businessman Asa Griggs Candler secured rights to the business for a total of about $2,300. Candler would become the Company's first president, and the first to bring real vision to the business and the brand. 1893-1904 Asa G. Candler, a natural born salesman, transformed CocaCola from an invention into a business. He knew there were thirsty people out there, and Candler found brilliant and
  24. 24. 23 innovative ways to introduce them to this exciting new refreshment. He gave away coupons for complimentary first tastes of CocaCola, and outfitted distributing pharmacists with clocks, urns, calendars and apothecary scales bearing the CocaCola brand. People saw CocaCola everywhere, and the aggressive promotion worked. By 1895, Candler had built syrup plants in Chicago, Dallas and Los Angeles. In 1894, a Mississippi businessman named Joseph Biedenharn became the first to put CocaCola in bottles. He sent 12 of them to Candler, who responded without enthusiasm. Despite being a brilliant and innovative businessman, he didn't realize then that the future of CocaCola would be with portable, bottled beverages customers could take anywhere. He still didn't realize it five years later, when, in 1899, two Chattanooga lawyers, Benjamin F. Thomas and Joseph B. Whitehead, secured exclusive rights from Candler to bottle and sell the beverage for only one dollar. 1905-1918 Imitation may be the sincerest form of flattery, but The CocaCola Company was none too pleased about the proliferation of copycat beverages taking advantage of its success. This was a great product, and a great brand. Both needed to be protected. Advertising focused on the authenticity of CocaCola, urging consumers to "Demand the genuine" and "Accept no substitute." The Company also decided to create a distinctive bottle shape to assure people they were actually getting a real CocaCola. The Root Glass Company of Terre Haute, Indiana, won a contest to design a bottle that could be recognized in the dark. In 1916, they began manufacturing the famous contour bottle. The contour bottle, which remains the signature shape of CocaCola today, was chosen for its attractive appearance, original design and the fact that, even in the dark, you could identify the genuine article.
  25. 25. 24 As the country roared into the new century, The CocaCola Company grew rapidly, moving into Canada, Panama, Cuba, Puerto Rico, France, and other countries and U.S.territories. In 1900, there were two bottlers of Coca-Cola; by 1920, there would be about 1,000. 1919-1940 Perhaps no person had more impact on The CocaCola Company than Robert Woodruff. In 1923, four years after his father Ernest purchased the Company from Asa Candler, Woodruff became the Company president. While Candler had introduced the U.S. to CocaCola, Woodruff would spend more than 60 years as Company leader introducing the beverage to the world beyond. Woodruff was a marketing genius who saw opportunities for expansion everywhere. He led the expansion of CocaCola overseas and in 1928 introduced CocaCola to the Olympic Games for the first time when CocaCola traveled with the U.S. team to the 1928 Amsterdam Olympics. Woodruff pushed development and distribution of the six-pack, the open top cooler, and many other innovations that made it easier for people to drink CocaCola at home or away. This new thinking made CocaCola not just a huge success, but a big part of people's lives. 1941-59 In 1941, America entered World War II. Thousands of men and women were sent overseas. The country, and CocaCola, rallied behind them. Woodruff ordered that "every man in uniform gets a bottle of CocaCola for 5 cents, wherever he is, and whatever it costs the Company." In 1943, General Dwight . D. Eisenhower sent an urgent cablegram to CocaCola, requesting shipment of materials for 10 bottling plants. During the war, many people enjoyed their first taste of the beverage, and
  26. 26. 25 when peace finally came, the foundations were laid for CocaCola to do business overseas. Woodruff‟s vision that CocaCola be placed within "arm's reach of desire," was coming true -from the mid-1940s until 1960, the number of countries with bottling operations nearly doubled. Post-war America was alive with optimism and prosperity. CocaCola was part of a fun, carefree American lifestyle, and the imagery of its advertising -- happy couples at the drive-in, carefree moms driving big yellow convertibles -- reflected the spirit of the times. 1960-81 After 70 years of success with one brand, CocaCola®, the Company decided to expand with new flavors: Fanta®, originally developed in the 1940s and introduced in the 1950s; Sprite® followed in 1961, with TAB® in 1963 and Fresca® in 1966. In 1960, The CocaCola Company acquired The Minute Maid Company, adding an entirely new line of business -- juices -- to the Company. The Company's presence worldwide was growing rapidly, and year after year, CocaCola found a home in more and more places: Cambodia, Montserrat, Paraguay, Macau, Turkey and more. Advertising for CocaCola, always an important and exciting part of its business, really came into its own in the 1970s, and reflected a brand connected with fun, friends and good times. In 1978, The CocaCola Company was selected as the only Company allowed to sell packaged cold drinks in the People's Republic of China. 1982-89 The 1980s -- the era of legwarmers, headbands and the fitness craze, and a time of much change and innovation at The CocaCola Company. In 1981, Roberto C. Goizueta became chairman of The Board of Directors and CEO of The CocaCola Company. Goizueta, who fled Castro's Cuba in 1961, completely overhauled the Company with a strategy he called "intelligent risk taking."
  27. 27. 26 Among his bold moves was organizing the numerous U.S. bottling operations into a new public company, CocaCola Enterprises Inc. He also led the introduction of diet Coke®, the very first extension of the CocaCola trademark; within two years, it had become the top low-calorie drink in the world, second in success only to CocaCola. One of Goizueta's other initiatives, in 1985, was the release of a new taste for CocaCola, the first change in formulation in 99 years. In taste tests, people loved the new formula, commonly called “new Coke.” In the real world, they had a deep emotional attachment to the original, and they begged and pleaded to get it back. Critics called it the biggest marketing blunder ever. But the Company listened, and the original formulawas returned to the market as CocaCola classic®, and the product began to increase its lead over the competition -- a lead that continues to this day. 1990-99 The 1990s were a time of continued growth for The CocaCola Company. The Company's long association with sports was strengthened during this decade, with ongoing support of the Olympic Games, FIFA World Cup™ football (soccer), Rugby World Cup and the National Basketball Association. CocaCola classic became the Official Soft Drink of NASCAR racing, connecting the brand with one of the world's fastest growing and most popular spectator sports. And 1993 saw the introduction of the popular "Always CocaCola" advertising campaign, and the world met the lovable CocaCola Polar Bear for the first time. New markets opened up as CocaCola products were sold in East Germany in 1990 and returned to India in 1993. New beverages joined the Company's line-up, including Powerade® sports drink, Qoo® children's fruit drink and Dasani® bottled water. The Company's family of brands further expanded through acquisitions, including Limca®, Maaza® and Thums Up® in India, Barq's®
  28. 28. 27 root beer in the U.S., Inca Kola® in Peru, and Cadbury Schweppes'® beverage brands in more than 120 countries around the world. By 1997, the Company already sold 1 billion servings of its products every day, yet knew that opportunity for growth was still around every corner. 2000-13 In 1886, CocaCola® brought refreshment to patrons of a small Atlanta pharmacy. Now well into its second century, the Company's goal is to provide magic every time someone drinks one of its more than 500 brands. CocaCola has fans from Boston to Budapest to Bahrain, drinking brands such as Ambasa,Vegitabeta and Frescolita. In the remotest comers of the globe, you can still find CocaCola. CocaCola is committed to local markets, paying attention to what people from different cultures and backgrounds like to drink, and where and how they want to drink it. With its bottling partners, the Company reaches out to the local communities it serves, believing that CocaCola exists to benefit and refresh everyone it touches. From the early beginnings when just nine drinks a day were served, CocaCola has grown to the world‟s most ubiquitous brand, with more than 1.7 billion beverageservings sold each day. When people choose to reach for one of The CocaCola Company brands, the Company wants that choice to be exciting and satisfying, every single time.
  29. 29. 28 MANIFESTO FOR GROWTH As per Coca Cola: “The world is changing all around us. To continue to thrive as a business over the next ten years and beyond, we must look ahead, understand the trends and forces that will shape our business in the future and move swiftly to prepare for what's to come. We must get ready for tomorrow today. That's what our 2020 Vision is all about. It creates a long-term destination for our business and provides us with a "Roadmap" for winning together with our bottling partners”. 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.
  30. 30. 29 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”. 2020 Vision & Commitment “In early 2009, CCE convened an environmental summit to set out global goals for corporate responsibility. We set out a road map for achieving them by the year 2020. We call it Commitment 2020”. CCE has set out longer-term objectives as part of this commitment. These cover:  Energy conservation/climate change- reduce the overall carbon footprint of our business operations by 15% by 2020, as compared to 2007 baseline.  Sustainable packaging/recycling- reduce the impact of our packaging; maximize our use of renewable, reusable, and recyclable resources to recover the equivalent of 100 percent of our packaging.  Water stewardship- establish a water sustainable operation in which we minimize our water use and have a water neutral impact on the local communities in which we operate. We'll safely return the amount of water equivalent to that used in our beverages and their production to these communities and their environment.  Product portfolio/wellbeing- provide refreshing beverages for every lifestyle and occasion, while helping consumers make informed beverage choices.
  31. 31. 30  Diverse and inclusive culture- create a culture where diversity is valued, every employee is a respected member of the team, and our workforce is a reflection of the communities in which we operate. Values: Coca-Cola is guided by shared values that both the employees as individuals and the Company will live by; the values being:  LEADERSHIP:The courage to shape a better future  PASSION:Committed in heart and mind  INTEGRITY:Be real  ACCOUNTABILITY:If it is to be, it‟s up to me  COLLABORATION:Leverage collective genius  INNOVATION:Seek, imagine, create, delight  QUALITY:What we do, we do well (http://www.coca-colaindia.com/, June 2013)
  32. 32. 31 Figure 2: Vision for sustainable growth
  33. 33. 32 SOFT DRINK MARKET IN INDIA 2013 The latest beverage market stats are out — and there are some interesting highlights.The epic battle between Coke and Pepsi continues, but so far Coke still has the top spot. Both Coke and Pepsi fans are a loyal bunch so it will be hard to sway either of them to the other side. The transition……….. ( 2012& 2013 scenario ) 2012 2011 2007 1. CocaCola Classic(CocaCola) CocaCola Classic(CocaCola) CocaCola Classic(CocaCola) 2. Diet Coke(CocaCola) Diet Coke(CocaCola) Pepsi-cola(PepsiCo) 3. Pepsi-cola(PepsiCo) Pepsi-cola(PepsiCo) Diet Coke (CocaCola) 4. Mountain Dew(PepsiCo) Mountain Dew(PepsiCo) Mountain Dew (PepsiCo) 5. Dr Pepper(Dr. Dr Pepper(Dr. Diet Pepsi (PepsiCo) Pepper/Snapple) Pepper/Snapple) 6. Sprite (CocaCola) Sprite (CocaCola) 7. Diet Pepsi(PepsiCo) Diet Pepsi(PepsiCo) Sprite (CocaCola) 8. Diet Mountain Dew(PepsiCo) Diet Mountain Dew(PepsiCo) Fanta (CocaCola) 9. Fanta(CocaCola) 10. Diet Dr. Pepper Pepper/Snapple) Table 1 Diet Dr. Pepper/Snapple) (Dr. Fanta(CocaCola) Dr (Cadbury- Pepper Schweppes) Pepper(Dr. Caffeine-Free Diet Coke (CocaCola) Diet (PepsiCo) Mountain Dew
  34. 34. 33 The findings of the first ever Most Exciting Brands survey in 2013 reaffirm that four cola brands feature in the Top 5 rankings: CocaCola emerges as the most exciting brand followed by Thums Up at no. three, Sprite at no. four &Maaza at no. five. Figure 3: 2013 Brand survey (http://articles.economictimes.indiatimes.com/)
  35. 35. 34 COCACOLA IN INDIA The CocaCola Company's brands in India include Coca-Cola, Fanta Orange, Limca, Sprite, Thums Up, Burn, Kinley, Maaza, Minute Maid Pulpy Orange, Minute Maid Nimbu Fresh and the Georgia Gold range of teas and coffees and Vitingo. In India, the CocaCola system comprises of a wholly owned subsidiary of The CocaCola Company namely CocaCola India Pvt. Ltd which manufactures and sells concentrate and beverage bases and powdered beverage mixes, a Company-owned bottling entity, namely, Hindustan CocaCola Beverages Pvt. Ltd;thirteen authorized bottling partners of The CocaCola Company, who are authorized to prepare, package, sell and distribute beverages under certain specified trademarks of The CocaCola Company; and an extensive distribution system comprising of our customers, distributors and retailers. CocaCola India Private Limited sells concentrate and beverage bases to authorized bottlers who are authorized to use these to produce a portfolio of beverages.These authorized bottlers independently develop local markets and distribute beverages to grocers, small retailers, supermarkets, restaurants and numerous other businesses. They in turn make the beverages available throughout India. The CocaCola Company has invested nearly USD 2 billion in its operations in India since its reentry back into India in 1992. The CocaCola system in India directly employs over 25,000 people including those on contract. The system has created indirect employment for more than 1,50,000 people in related industries through its vast procurement, supply and distribution system.
  36. 36. 35 As a Company, the products are an integral part of the micro economy particularly in small towns and villages, contributing to creation of jobs and growth in GDP. CocaCola in India is amongst the largest domestic buyers of certain agricultural products. As an industry which has strong backward and forward linkages, the operations catalyze growth in demand for products like glass, plastic, refrigeration, transportation, and industrial and agricultural products. The operations also lead to incremental growth of the enterprises engaged in post-production activities like merchandising, marketing and sales. The CocaCola Company has always placed high value on good citizenship. The basic proposition entails that the Company's business should refresh the market; enrich the workplace; protect and preserve the environment; and strengthen the community. The company leverages its unique strengths to actively support and respond to local needs -be it the need for education, health, water or nutrition. It has used its distribution network for disaster relief, the marketing prowess to raise awareness on issues such as PET recycling. The CocaCola India Foundationis now taking forward, projects and programs of social relevance to carry forward the message of inclusive growth and development.
  37. 37. 36 SWOT ANALYSIS Strengths 1.The best Weaknesses Opportunities global 1.Significant focus on 1.Bottled Threats water 1.Changes in brand in the world in carbonated drinks consumption growth terms 2. Increasing demand 2. Water scarcity of value 2.Undiversified ($77,839 billion) 2. World‟s market product portfolio consumer preferences for healthy food and largest 3. High debt level due beverages share in to acquisitions beverage 4.Legal requirements to disclose negative 3. Growing beverages 4. Negative publicity information consumption product labels in on 3. Strong marketing 5. Brand failures or emerging markets 5. Decreasing gross and advertising profit and net profit 4. many Most with 4. Growth amount acquisitions brands extensive insignificant beverage distribution of revenues channel through margins 6. Competition from PepsiCo 5. Customer loyalty 7.Saturated 6. Bargaining power carbonated over suppliers market 7. Corporate Social Responsibility Table 2: SWOT analysis drinks
  38. 38. 37 Strengths 1. The best global brand in the world in terms of value. The Coca Cola Company is the most valued ($77,839 billion) brand in the world. 2. World’s largest market share in beverage. Coca Cola holds the largest beverage market share in the world (about 40%). 3. Strong marketing and advertising. Coca Cola’ advertising expenses accounted for more than $3 billion in 2012 and increased firm’s sales and brand recognition. 4. Most extensive beverage distribution channel. Coca Cola serves more than 200 countries and more than 1.7 billion servings a day. 5. Customer loyalty. The firm enjoys having one of the most loyal consumer groups. 6. Bargaining power over suppliers. The Coca Cola Company is the largest beverage producer in the world and exerts significant power over its suppliers to receive the lowest price available from them. 7. Corporate Social Responsibility (CSR). Coca Cola is increasingly focusing on CSR programs, such as recycling/packaging, energy conservation/climate change, active healthy living, water stewardship and many others, which boosts company’ social image and result in competitive advantage over competitors. Weaknesses 1. Significant focus on carbonated drinks. The Coca Cola Company is still focusing on selling Coke, Fanta, Sprite and other carbonated drinks. This strategy works in short term as consumption of carbonated drinks will grow in emerging economies but it will prove weak as the world is fighting obesity and is moving towards consuming healthier food and drinks.
  39. 39. 38 2. Undiversified product portfolio. Unlike most company’s competitors, Coca Cola is still focusing only on selling beverage, which puts the firm at disadvantage. The overall consumption of soft drinks is stagnating and Coca Cola Company will find it hard to penetrate to other markets (selling food or snacks) when it will have to sustain current level of growth. 3. High debt level due to acquisitions. Nearly $8 billion of debt acquired from CCE’s acquisition significantly increased Coca Cola's debt level, interest rates and borrowing costs. 4. Negative publicity. The firm is often criticized for high water consumption in water scarce regions and using harmful ingredients to produce its drinks. 5. Brand failures or many brands with insignificant amount of revenues. Coca Cola currently sells more than 500 brands but only few of the brands result in more than $1 billion sales. Plus, the firm’s success of introducing new drinks is weak. Many of its introduction result in failures, for example, C2 drink. Opportunities 1. Bottled water consumption growth. Consumption of bottled water is expected to grow both in US and the rest of the world. 2. Increasing demand for healthy food and beverages. Due to many programs to fight obesity, demand for healthy food and beverages has increased drastically. The Coca Cola Company has an opportunity to further expand its product range with drinks that have low amount of sugar and calories. 3. Growing beverages consumption in emerging markets. Consumption of soft drinks is still significantly growing in emerging markets, especially BRIC countries, where Coca Cola could increase and maintain its beverage market share. 4. Growth through acquisitions. Coca Cola will find it hard to keep current growth levels and will find it hard to penetrate new markets with its existing product portfolio. All this can be done more easily through acquiring other companies.
  40. 40. 39 Threats 1. Change in consumer tastes. Consumers around the world become more health conscious and reduce their consumption of carbonated drinks, drinks that have large amounts of sugar, calories and fat. This is the most serious threat as Coca Cola is mainly serving carbonated drinks. 2. Water scarcity. Water is becoming scarcer around the world and increases both in cost and criticism for Coca Cola over the large amounts of water used in production. 3. Legal requirements to disclose negative information on product labels. Some Coca Cola’s carbonated drinks have adverse health consequences. For this reason, many governments consider to pass legislation that requires disclosing such information on product labels. Products containing such information may be perceived negatively and lose its customers. 4. Decreasing gross profit and net profit margins. Coca Cola’s gross profit and net profit margin was decreasing over the past few years and may continue to decrease due to higher water and other raw material costs. 5. Competition from PepsiCo. PepsiCo is fiercely competing with Coca Cola over market share in BRIC countries, especially India. 6. Saturated carbonated drinks market. The company significantly relies on the carbonated drinks sales, which is a threat for the Coca Cola as the market of carbonated drinks is not growing or even declining in the world. (http://www.strategicmanagementinsight.com)
  41. 41. 40 PORTER’S FIVE FORCES ANALYSIS  RIVALRY AMONG EXISTING FIRMS: The greatest competition that CocaCola faces is from the rival sellers within the industry. CocaCola, Pepsi Co are among the largest competitors in this industry, and they are all globally established which creates a great amount of competition. CocaCola 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. Overall, CocaCola continues to outsell Pepsi in almost all areas of the world. By most accounts, CocaCola was India's leading soft drink until 1977 when it left India after a new government ordered, The CocaCola 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-
  42. 42. 41 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 CocaCola Company returned in pursuance of India's Liberalization policy. In 2005, The CocaCola Company and PepsiCo together held 95% market share of soft-drink sales in India. CocaCola 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 PepsiCo was granted exportation and Western marketing rights to Stolichnaya vodka in exchange for importation and Soviet marketing of Pepsi-Cola. Pepsi is 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.  POTENTIAL ENTRANTS: New entrants are not a strong competitive pressure for the soft drink industry. CocaCola 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 labor, 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.  THREAT OF 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
  43. 43. 42 advertising and promotion traditionally has had a significant effect on beverage purchasing behaviour. “For years the story in the non-alcoholic sector centered 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 flavors and looking to noncarbonated beverages for growth.” Substitute products are those competitors that are not in the soft drink industry. Such substitutes for CocaCola products are bottled water, sports drinks, coffee, and tea, juices etc. Bottled water, fruit juices 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 flavors 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. In order for soft drink companies to continue to grow and increase profits they need to diversify their product offerings. So in order to compete with the substitutes industry, CocaCola has diversified from just carbonated drink industry to other substitute and so have other brands like Pepsi, Dr. Pepper/Snapple.  BARGANING 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
  44. 44. 43 concentrates. 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.  BARGANING POWER OF 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
  45. 45. 44 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.
  46. 46. 45 PEST ANALYSIS OF COCA COLA (2013) As the leading beverages company in the world, Coca Cola almost monopolizes the entire carbonated beverages segment. Beside it, Coca Cola also maintain their reputation as the leading company in the world using PEST Analysis so that Coca Cola can examine the macroenvironment of Coca Cola‟s operations. Political When Coca Cola had decided to enter a country to distribute the products, Coca Cola was monitoring the policies and regulations of each country. For the example, when entering Moslems country such as Indonesia or Malaysia, Coca Cola followed the regulation by adding “Halal” stamp in each Coca Cola‟s products. In this case, Coca Cola has no political issues in this matter. Economic Coca Cola also has low growth in the market for carbonated beverages (North America). The market growth was 1% in 2004. For stimulating the growth, Coca Cola had spent high budget of advertisement to endorse the customers. Social Nowadays, customers tend to change their lifestyle. Customers more aware about health consciousness by reducing in drinking carbonated beverages to prevent diabetes or other diseases. As a result, Coca Cola‟s demand for carbonated beverages has decreased and the revenues also decreased. Thus, Coca Cola diversified its products by adding production lines in tea (Nestea), juices (Minute Maid), mineral water (Bisleri)etc. Technological Because of the developing technology, Coca Cola has advanced technology in producing the products. Then, Coca Cola made innovations by giving flavors to the Coke, such as Cherry Coke, Diet Coke, Coca Cola Zero, Coke with Lime, and others. But, the customers still prefer the original taste of traditional coke; it can be seen by the high demands in traditional coke. (http://smallbecomesgiant.wordpress.com/2013/04/04)
  47. 47. 46 STRATEGIES A businesses corporate Strategy is aimed at the company`s overall scope and direction. Business strategy is a long term plan of action designed to achieve a set of company goals and objectives. An internationalization strategy is aimed at ideas that will help expand the business abroad. Coca-Colas number one goal is to maximize growth and profitability to create value for their shareholders. They plan to achieve these goals by (1) Transforming their commercial models to focus on their customers‟ value potential and using a value-based segmentation approach to capture the industry‟s value potential. (2) Implementing multi-segmentation strategies in their major markets to target distinct market clusters divided by consumption occasion, competitive intensity and socioeconomic levels (3) Implementing well-planned product, packaging and pricing strategies through different distribution channels. (4) Driving product innovation along there different product categories and achieving the full operating potential of our commercial models and processes to drive operational efficiencies throughout our company. VRIO  The Question of Value: "Is the firm able to exploit an opportunity or neutralize an external threat with the resource/capability?"  The Question of Rarity: "Is control of the resource/capability in the hands of a relative few?"  The Question of Imitability: "Is it difficult to imitate, and will there be significant cost disadvantage to a firm trying to obtain, develop, or duplicate the resource/capability?"  The Question of Organization: "Is the firm organized, ready, and able to exploit the resource/capability?
  48. 48. 47 DISTRIBUTION Value: CocaCola focuses its distribution more on the fountain market with restaurants. While retail distribution is important, there is bigger margin for fountain sales. Distribution through global markets has proved to be valuable in strengthening their distribution network. Rarity: The size of CocaCola`s distribution network is rare because they deliver their product to many different buyers on an international scale. CocaCola only produces the syrup concentrate which it then sends to it bottlers, who distribute to retailers. CocaCola has sustained competitive advantage by having a straightforward, efficient channel design. Imitability: The push and pull distribution strategy of CocaCola may be imitated in its basic essence, but size of their channels is unique. Organization: CocaCola is able to exploit their distribution by entering foreign markets to dominate their market share. For example, in Mexico there is not much clean water to drink. CocaCola realizes this and heavily distributes and advertises in Mexico. Producing Coke in Mexico uses the clean water available, forcing Mexican citizens to buy CocaCola beverages to satisfy their thirst.
  49. 49. 48 DIFFERENTIATION Value: CocaCola‟s product has value in its differentiation from competitors based on its taste. A common reason people say they drink Coke is because “it tastes better than Pepsi. The recipe is the biggest secret CocaCola has to their success. This value is spread to Coca-Cola‟s other product lines. Rarity: CocaCola differentiation strategy is rare considering that when people thinking of drinking cola, CocaCola is typically the first soda that comes to mind. Indirectly engraining an idea that your product is “the” product to choose into consumers‟ minds has allowed CocaCola to sustain a competitive advantage. Imitability: CocaCola experiences imitability, considering in essence it is a standard cola beverage. There are hundreds of generic colas on the market. While the type of product is easily imitated, the specific product of Coke is not imitable. Organization: CocaCola uses brand value to exploit its differentiation. Color plays a role in differentiation because red signifies Coke over the Pepsi blue. They also exploit their wholesome family brand image but advertising towards this segment (Santa/polar bear commercials.)
  50. 50. 49 COMPETITORS OF COCA COLA Pepsi, the flagship product of PepsiCo, The Coca-Cola Company's main rival in the soft drink industry, is usually second to Coke in sales, and outsells Coca-Cola in some markets. In India, the competitors of the Coca Cola beverages are Pepsico, Parle Agro, Dabur, Nestle etc. in the branded cold drinks, mineral water & juices.
  51. 51. 50 DISTRIBUTION ROUTES The various routes formulated by HCCBPL for distribution of products are as follows:  Key Accounts: The customers in this category collectively contribute a large chunk of the total sales of the Company. It basically consists of organizations that buy large quantities of a product in one single transaction. The Company provides goods to these customers on credit, payments being made by them after a certain period of time i.e. either a month of half a month. Examples: Clubs, fine dine restaurants, hotels, corporate houses etc.  Future Consumption: This route consists of outlets of Coca-Cola products, wherein a considerable amount of stock is kept in order to use for future consumption. Examples: Departmental stores, supermarkets etc.  Immediate Consumption: The outlets in this route are those which require stocks on a daily basis. The stocks of products in these outlets are not stored for future use instead, are exhausted on the same day and might run a little into the next day i.e. the products are consumed at a fast pace. Examples: Small sized bars and restaurants, educational institutions etc.
  52. 52. 51  General: Under this route, all the outlets that come in a particular area or an area along with its neighboring areas are catered to. The consumption period is not taken into consideration in this particular route. DISTRIBUTION SYSTEM  Direct distribution: In direct distribution, the bottling unit or the bottler partner has direct control over the activities of sales, delivery, and merchandising and local account management at the store level.  Indirect distribution: In indirect distribution, an organization which is not part of the CocaCola system has control on one or more of the distribution elements (sales, delivery, merchandising and local account management)  Merchandising: Merchandising means communication with the consumer at the point of purchase to convey product benefit, value and Quality. personnel both have this responsibility. Sales people anddelivery
  53. 53. 52 DISTRIBUTION BHUBANESWAR SYSTEM FOLLOWED AT COCA COLA Direct Sales Distribution (DSD): HCCBPL, Mancheswar comes under this category. The material`s procured from the Coca Cola plant located at Khurda. The company`s vehicles supply the materials to the customers as per the orders received. Plant Route to market (RTM) Distributor Retailer Customer Figure 4: Direct sales distribution
  54. 54. 53 Distribution Automated System (DAS): Here, Market Developers are appointed by the company. They visit the retail outlets & punch orders. The orders are handled by a third party. Improvised Distribution Automated System (IDAS): It is an improvised version of DAS.
  55. 55. 54 CHAPTER 3
  56. 56. 55 PACKAGING DETAILS OF COCACOLA PRODUCTS  Coca Cola: Can : 300 ml, 330 ml RGB : 200 ml, 300 ml, 330 ml PET : 350 ml, 400 ml, 500 ml, 600 ml, 1250 ml, 1500 ml, 2000 ml, 2250 ml Fountain Glass : various sizes
  57. 57. 56  Diet coke: PET : 350 ml, 500 ml Can : 300 ml, 330 ml  Thums Up: Can : 300 ml, 330 ml RGB : 200 ml, 300 ml, 330 ml PET : 350 ml, 400 ml, 500 ml, 600 ml, 1250 ml, 1500 ml, 2000 ml, 2250 ml Fountain Glass : various sizes  Sprite: Can : 300 ml, 330 ml RGB : 200 ml, 300 ml, 330 ml PET : 350 ml, 400 ml, 500 ml, 600 ml, 1250 ml, 1500 ml, 2000 ml, 2250 ml Fountain Glass : various sizes  Fanta: Can : 300 ml, 330 ml RGB : 200 ml, 300 ml, 330 ml PET : 350 ml, 400 ml, 500 ml, 600 ml, 1250 ml, 1500 ml, 2000 ml, 2250 ml Fountain Glass : various sizes  Limca: Can : 300 ml, 330 ml RGB : 200 ml, 300 ml, 330 ml PET : 350 ml, 400 ml, 500 ml, 600 ml, 1250 ml, 1500 ml, 2000 ml, 2250 ml Fountain Glass : various sizes  Maaza: RGB : 200 ml, 250 ml PET : 250 ml, 400 ml, 600 ml, 1.2 L
  58. 58. 57 Pocket pack:200ml  Burn: Can : 300 ml  Kinley water: PET : 500 ml, 1000 ml, 2 L, 20 L, 25 L  Kinley soda: RGB : 200 ml, 300 ml PET : 350 ml, 500 ml, 1.25 L, 1.5 L, 2 L  Schweppes: Bitter lemon : Glass bottle: 250 ml Tonic water : Glass bottle: 250 ml Ginger ale : Glass bottle: 250 ml Soda water : Glass bottle: 250 ml  Georgia Gold: Hot & cold beverages available in various sizes
  59. 59. 58 CHAPTER 4
  60. 60. 59 CONCEPTUAL BACKGROUND  Marketing channels: Marketing channels' set of practices or activities necessary to transfer the ownership of goods, and to move goods, from the point of production to the point of consumption and, as such, which consists of all the institutions and all the marketing activities in the marketing process. A marketing channel is a useful tool for management. Roles of marketing channel in marketing strategies:      Links producers to buyers. Performs sales, advertising and promotion. Influences the firm's pricing strategy. Affecting product strategy through branding, policies, willingness to stock. Customizes profits, install, maintain, offer credit, etc. An alternative term isdistribution channel or 'route-to-market'. It is a 'path' or 'pipeline' through which goods and services flow in one direction (from vendor to the consumer), and the payments generated by them flow in the opposite direction (from consumer to the vendor). A marketing channel can be as short as being direct from the vendor to the consumer or may include several inter-connected (usually independent but mutually dependent) intermediaries such as wholesalers, distributors, agents, retailers. Each intermediary receives the item at one pricing point and moves it to the next higher pricing point until it reaches the final buyer.
  61. 61. 60 Figure 5: Customer marketing channels & business marketing channels
  62. 62. 61  Wholesalers Wholesalers are independently owned firms that take title to the merchandise they handle. nIother words, the wholesalers own the products they sell. Wholesalers purchase product in bulk and store it until they can resell it. Wholesalers generally sell the products they have purchased to other intermediaries, usually retailers, for a profit.  Distributors Distributors are similar to wholesalers, but with one key difference. Wholesalers will carry a variety of competing products, for instance Pepsi and Coke products, whereas distributors only carry complementary product lines, either Pepsi or Coke products. Distributors usually maintain close relationships with their suppliers and customers. Distributors will take title to products and store them until they are sold.  Retailers A retailer takes title to, or purchases, products from other market intermediaries. Retailers can be independently owned and operated, like small “mom and pop” stores, or they can be part of a large chain, like Walmart. The retailer will sell the products it has purchased directly to the end user for a profit.  Intermediary An intermediary (or go-between) is a third party that offers intermediation services between two trading parties. The intermediary acts as a conduit for goods or services offered by a supplier to a consumer. Typically the intermediary offers some added value to the transaction that may not be possible by direct trading. (http://en.wikipedia.org/ 26 June 2013)  Key Account Management
  63. 63. 62 It is normally associated with the idea of looking after large and important accounts that are critical to the business. Key account management includes sales but also includes planning and managing the full relationship between a business and its most important customers. An account manager who works in this role will engage in a variety of tasks including project management, coordination, strategic planning, relationship management, negotiation, leadership and innovative development of opportunities, keeping a record of transaction of sale and purchase goods. Key Account Management (KAM) is far more than just selling products to big customers, its dealing with those customers who have a strategic role to play in the growth of a supplier. This therefore includes a range of accounts big, small and indifferent that`re perceived to be heading in a direction that is critical to the supplier. The only single trait that seems to be common across the board is that all definitions of KAM involve having an external relationship with buyers. (www.iimahd.ernet.in/assets/snippets/.../13002953852012-06-08.pdf)  Modern Trading Culture With increasing competition everyday in the consumer market, the world has shifted towards modern trading concepts. The modern trading concept has two major objectives: to provide the basic necessities under one roof. Secondly, the customer should be able to touch the products in person. Metro and Macro are the examples of modern trading stores.
  64. 64. 63 Figure 6: Key account management In 21st century, customer focused businesses attempt to identify few customers from the portfolio of their customer base and try to establish and nurture long term fruitful relationships. Many companies have created positions of key account managers for this purpose. KAM is considered as a management approach adopted by selling company. It builds portfolio of loyal key accounts (also termed as major accounts as they form substantial portion of selling company‟s business/sales). Such accounts are offered on a continuousbasis by adding value to standard product &/or service package. Appropriate technical,social and process links get established once this concept is accepted to be practiced by both; a buyer and a seller. The focus is on building relations rather than on transactions. (www.iimahd.ernet.in/assets/snippets/.../13002953852012-06-08.pdf)
  65. 65. 64  Loyalty Ladder: As the customer makes repeat purchases, the seller shifts the focus from transactional state to relational state and the customer starts climbing loyalty ladder as depicted in the Table. With the first order, the buyer becomes a customer from a prospect ; with repeat orders moves to a status of a regular customer. The relations over time make the buyer a supporter. The mutually beneficial relationsbetween buyer and seller turns a buyer to be an advocate for the seller. Over time,buyer seller become partners in good as well as bad times. The seller devises strategies to make the loyalty stronger and help buyer climb the loyalty ladder. (www.iimahd.ernet.in/assets/snippets/.../13002953852012-06-08.pdf) Figure 7: Customer relationship ladder
  66. 66. 65  Emerging channels: These`re the new channels through which products can be delivered to the ultimate consumers. The more the new channels, the more will be the scope for a company to expand its business.  Marketing mix: Comprises of element like : Product, Price, Place, Promotion. Productis seen as an item that satisfies what a consumer needs or wants. It is a tangible good or an intangible service. The marketer must also consider the product mix. Marketers can expand the current product mix by increasing a certain product line's depth or by increasing the number of product lines. Marketers should consider how to position the product, how to exploit the brand, how to exploit the company's resources and how to configure the product mix so that each product complements the other. The marketer must also consider product development strategies. Price is the amount a customer pays for a product. The price is very important as it determines the company's profit and hence, survival. Adjusting the price has a profound impact on the marketing strategy, and depending on the price elasticity of the product, often it will affect the demand and sales as well. The marketer should set a price that complements the other elements of the marketing mix. When setting a price, the marketer must be aware of the customer perceived value for the product. Promotion refers to all the methods of communication that a marketer may use to provide information to various parties about a product. Promotion comprises elements such as: advertising, public relations, personal selling and sales promotion.
  67. 67. 66 Place refers to providing the product at a place which is convenient for consumers to access. Various strategies such as intensive distribution, selective distribution, exclusive distribution and franchising can be used by the marketer to complement the other aspects of the marketing mix. The seven Ps is an additional marketing model that refers to the already mentioned four Ps, plus 'Physical evidence', 'People', and 'Process'. (http://en.wikipedia.org/25 June 2013) Figure 8 : The 4 Ps of marketing
  68. 68. 67  Customer Relationship Management: Acquiring a customer may be important. However, more important is maintaining an appropriate and long standing relationship with the existing customers.  Sales optimization: Boosting the sales of a product by market penetration strategy, driving the customers away from the competitors` products.  Gap analysis: There are four important and frequent questions a business should ask itself: 1. 2. 3. 4. Where am I now? Where do I want to be? How will I get there? When will I get there? The point between where the business is now and where the business wants to be is known as the gap. Calculating the "gap" is known as gap analysis. Figure 9: Gap analysis
  69. 69. 68 Once a business has identified a performance gap, the first challenge in closing the gap is to identify the causes behind the gap. There could be any number of reasons within the marketing environment including poor sales strategy, strong competition, or a struggling national economy. The cause could be obvious or the company may need to carry out research to find out exactly what the problem is. Once an accurate cause (or causes) have been discovered the firm can write an action plan. There are a number of remedial strategies available, the correct remedy will depend on the cause of the gap and the firm's resources. Gap closure: If the cause of the gap is the manner in which the firm carries out all of its business operations a change in corporate strategy is required. A good starting point is Ansoff's Growth Matrix. Ansoff's growth strategy provides the firm with one of four options and involves a firm's products and the markets it operates in. Under Ansoff's matrix a firm can employ a market penetration strategy, product development strategy, market development strategy or a diversification strategy to help close the gap. Each of thesedecisions will involve the firm as a whole, so they are known as are strategic level decisions. Figure 10: Gap closure Gap Closure through marketing tactics
  70. 70. 69 If the cause is connected with specific elements of the business the solution will probably need to concentrate on just these elements. It could be that sales are falling because of a lack of promotion. A simple advertisement targeted in the right medium could help raise those sales. These are tactical decisions.In this instance the solution could pick out the relevant elements from the 7Ps. The 7Ps are the traditional marketing mix of price, place, promotion, product and people, process, and physical evidence. The three additional elements (people, process and physical evidence) allow firms to deal with any issues connected with providing a service. (www.learnmarketing.net)
  71. 71. 70 CHAPTER 5
  72. 72. 71 INTRODUCTION TO THE STUDY NEED OF THE STUDY OR THE PROBLEM OF THE STUDY The aim of this research study is to explore the opportunities associated with the emerging channels. The emerging channels include the catering services and the event management organizations. LITERATURE REVIEW Until now, no such effort has been made as, evident from the references which have looked upon the above mentioned sectors in the domestic region of Bhubaneswar, Odisha. The work clearly shows a lot of gap in this segment. Channels are generally grouped into four categories: Direct, Manufacturers Representative, Distribution, and Value Added Reseller. The Direct channel is the manufacturer‟s direct sales force, staffed by the manufacturer‟s employees. It sells directly to some end-user customers. A Distribution channel has third-party organizations (Distributors) which buy the products of many manufacturers and then resell them to their own customers. Their customers may include
  73. 73. 72 end-user customers, Value Added Reseller organizations, or other distributors. Distributors include Master Distributors, Distributors, Mail Order firms, Brokers, Dealers, and Retail outlets. Supermarkets and hardware stores are examples of retail outlets that sell to end-user customers. (Introduction to Sales Channels: Handbook of channel marketing) Market needs the long-term relationship between the buyer and seller to maintain growth (Bejou, 1997). Zikmund, Mcleod, and Gilbert (2003) used the term “one-to-one marketing” to describe relationship marketing theory because of the business owner‟s tailored marketing to individuals. The customers are loyal to sellers with high product quality if they equate the product price with its value. The relationship marketing theory revolves around three aspects.  According to Zikmund, Mcleod, and Gilbert (2003), the first aspect is financial incentives, in which the customer receives rewards or discounts .  The second aspect is social bonding between the company and the customer.  The third aspect is structural interaction. The relationship marketing importance resides in the strong bonding between the company and the customers which results in a longterm relationship that allows the business owner to plan, stock and provide products wanted repeatedly by the loyal customers (Hair, Bush, &Ortinau, 2003). The relationship is maintained by stating the facts and giving the necessary information to the customer. Relationship marketing takes part of the risk to prevent any risk that the buyer may encounter from the selling and buying experience. “The relationship marketing strategies are concerned with the development and enhancement of relationships with a number of key markets” (Šimberová, 2007, p. 207). Marketers should not subscribe to the caveat emptor principal because it makes the relationship between the seller and the buyer deteriorate. Inks, Avila and Chapman (2004) found that buyers are more ethically sensitive to unethical behavior. Buyers have stronger negative reaction to lying when this lying was from the seller; however, the buyers were less sensitive to their deceit (lying) because they justify it with the resulting low price.
  74. 74. 73 Companies seek customer‟s commitment; however customer commitment can result from satisfying the customer by offering him or her good product or service in exchange for his or her money. Satisfaction comes from product quality and service quality, which is supported by price fairness (Worrall, Parkes& Coop2004). Polk (2008) states that managers should be accountable for the company‟s innovations and the change it leads to successfully. Managers should abandon old ideas when those become a threat to the organization but learn that failures are opportunities to learn. Peter Drucker stated that organizational profit is necessary to supply capital for future innovation and expansion (Drucker, 2004). Chiung-Ju and Wen-Hung (2008) listed different tactics the retailers use to enhance customer loyalty thatbranch from financial, social andstructural bonding activities. Financial bonding includes discounts and interest rate. Social bonding is the relationship created between the two parties during a business interaction and follow up interactions (Chiung-Ju& Wen-Hung, 2008). The final tactic is structural in which the organization set up rules, policies and procedures to structure its relationship with the customers. Survey of 205 companies reported that more than 50% of surveyed companies are generating 75% of their sale from the existing customers (Carter, 2008). Customer loyalty is important because almost all of the companies had lost a top customer to a competitor in the last three years (Carter, 2008). The surveyed companies measure their customer retention thatindicates the company‟sawareness of the customer retention importance (Carter, 2008). The most important finding of Carter (2008) survey was the strong link between customer retention and customer satisfaction. Companies would benefit of generating 75% of their sale from a satisfied and retained customer. On the contrary, East, Hammond, and Gendall (2006) state that customer retention importance is overvalued and companies should target customer acquisition strategy. Customer retention strategy gains are less than customer acquisition according to East, Hammond, and Gendall (2006). Palmatier et al. (2009) state that loyal customers will experience strong pressure to reciprocate the benefits they received from others when they receive good service. People take the gratitude role when they receive benefits and suffer the guilt of not repaying the favor to the other party so the at least remain loyal to the favor maker. Roehm and Brady (2007) state that half of the researched customers switched brands because of a service failure or inappropriate response from the. Relationship marketing strengthen the relation with the customers but these customers have higher desire to revenge the brand when their complaints are not addressed appropriately (Grégoire, Tripp, &Legoux, 2009).
  75. 75. 74 Customer Relationship Management (CRM) main function is to increase the profitable customers‟ retention effectively by building and maintaining positive relationships (Payne &Frow, 2006). One of the main functions of CRM is to provide the organization with a single view of the customer, in which view the information may be split into different disciplines and categories (Tuck, 2008). Payne and Frow (2006) research on implementing a successful CRM resulted in identifying four elements which start with assessing the organization‟s readiness for a CRM initiative to estimate the effort needed to establish CRM; and help in the next step of managing the change .CRM implementations should be treated as a project and managed as a project that necessitates employees‟ engagement (Payne &Frow, 2006). Tuck (2008) state that CRM should be managing customer relationship but lately CRM became associated with software packages and the difficulty of setting one up. Tuck (2008) claims that CRM projects shifted the organizational focus to deploying and operating the software package instead of targeting business processes that would deliver the segmented information in a useful way to the organization. Crosby and Caroll III (2008) realized the difficulty in the customer management and suggested the following guidelines to help the organization better manage its customers: 1. Stated customer goal: state customers` expectations or what they would liketo receive from their relationship with the organization, and match them with the organizations internal goals. 2. Set clear customer strategy to better serve the customer. The organizations can excel in “operational excellence” like Southwest airline does or “product leadership” like Apple‟s innovative products or “customer intimacy” in the way Ritz-Carlton treat their customers. These strategies would help serve and retain the customers. 3. Define customer governance by appointing a chief customer officer with a team and resources to govern the customer‟s needs. 4. Create roadmap for the customer‟s external and internal goals and support themwith a strategy that ensures an adequate budget to the communication and motivation plans. ( Relationship marketing – Coca Cola in India: Sami Malallah's Blog ) CRM Customer Relationship Management is one of thenewest innovations in customer service today. CRM standsfor customer relationship management and helps themanagement and customer service staffs cope withcustomer concerns and issues. CRM involves gathering alot
  76. 76. 75 of data about the customer. The data is then used tofacilitate customer service transactions by making theinformation needed toresolve the issue or concern readily available to those dealing with the customers. This results in more satisfied customers, a more profitable business and more resources available to the support staff. Furthermore, CRM Customer Relationship Management systems are a great help to the management in deciding on the future course of the company. These fields include the customer name, address, date of transactions, pending and finished transactions, issues and complaints, status of order, shipping and fulfillment dates, account information, demographic data and many more. This information is important in providing the customer the answer that he or she needs to resolve the issue without having to wait for a long time and without going to several departments. With just a few mouse clicks, a customer support representative for example can track the location ofthe customer's package or order. Advantages of CRM CRM helps companies get an insight in to their sales activities, marketing activities and customer support activities. CRM solutions are particularly very helpful in companies that have a high purchase frequency/customer transactions. It‟s possible to outsource certain support activities to the customers through the CRM Systems to the benefit of both the vendor and customer. CRM helps in identifying profitable/ unprofitable customers, regular vs. one time customers, etc. so that companies can spend more resources for important customers. (CUSTOMER RELATIONSHIP MANAGEMENT WITH SPECIAL REFERENCE TO COCA COLA : BRAND PROMOTION USING SAP AS A MEDIUM FOR CRM- MeghaMathur, 2009) The increasing health consciousness and emphasis of healthy lifestyle not only in developed nations, but also in developing nations, have slowed down the sales of Coca-Cola‟s carbonated soft drinks. In response to this health consciousness issue, the company introduced Diet Coke in 1982. Such change of consumer life style had also led to the introduction of its bottled purified water. CocaCola marketing mix (Murden, Terry, 2005)
  77. 77. 76 Distribution is important because:  Firstly, it affects sales - if it's not available it can't be sold. Most customers won't wait.  Secondly, distribution affects profits and competitiveness since it can contribute up to 50 percent of the final selling price of some goods. This affects cost competitiveness as well as profits since margins are squeezed by distribution costs.  Thirdly, delivery is seen as part of the product influencing customer satisfaction. Distribution and its associated customer service play a big part in relationship marketing. Decisions about physical distribution are key strategic decisions. They are not short term. Increasingly it involves strategic alliances and partnerships which are founded on trust and mutual benefits Channels change throughout a product's life cycle. Changing lifestyles, aspirations and expectations along with the IT explosion offer new opportunities of using distribution to create a competitive edge. Controlling the flow of products and services from producer to customer requires careful consideration. It can determine success or failure in the market place. The choice of channel includes choosing among and between distributors, agents, retailers, franchisees, direct marketing and a sales force. Deciding between blanket coverage or selective distribution, vertical systems or multi-channel networks, strategic alliances or solo sales forces, requires strong strategic thinking. Decisions about levels of stock, minimum order quantities, delivery methods, delivery frequency and warehouse locations have major cash flow implications as well as customer satisfaction implications. All of these questions are considered in more detail in the sections on channels and strategies. Meanwhile remember Lambin - "distribution is one of the two main roles of marketing." Distribution Strategy Distribution strategy is influenced by the market structure, the firm's objectives, its resources and of course its overall marketing strategy. All these factors are addressed in the section on selecting Distribution Channels.
  78. 78. 77 The first strategic decision is whether the distribution is to be: Intensive (with mass distribution into all outlets as in the case of confectionery); Selective (with carefully chosen distributors e.g. specialty goods such as car repair kits); or Exclusive (with distribution restricted to upmarket outlets, as in the case of Gucci clothes). The next strategic decision clarifies the number of levels within a channel such as agents, distributors, wholesalers, retailers. In some Japanese markets there are many, many intermediaries involved. Next comes a sensitive strategic decision whether to go single channel or multi-channel. Some producers, like Manchester United FC, use multi-channels - they use many different routes, direct and indirect, to bring their products to their customers. Multi-channel Systems like this are common where intensive distribution is required. So direct marketing is combined with indirect marketing through intermediaries. Then comes the next level of strategic decisions concerning strategic relationships and partnerships. Two common strategies are Vertical Marketing Systems and Horizontal Marketing Systems. Vertical Marketing Systems involve suppliers and intermediaries working closely together instead of against each other. They plan production and delivery schedules, quality levels,promotions and sometimes prices. Resources, like information, equipment and expertise, are shared. The system is usually managed by a dominant member, or 'channel captain'. VMS is more flexible than vertical integration where the manufacturer actually owns the distribution channel, for example, Doctor Martens boot manufacturers own their own retail store. Horizontal Marketing Systems occur where organizations operating on the same channel level (e.g. two suppliers or two retailers) co-operate. They then share their distribution expertise and distribution channels. This can speed up the time taken to penetrate the market. There is room for creative alliances here. See Southwestern Bell's alliance with Granada TV Shops in the Hall Of Fame. Resources available affect distribution strategy. Who can handle outbound logistics, marketing and sales, and servicing? Can the supplier afford to deliver small quantities, can it provide more trucks, can its sales force 'push' products into national retail chains? Can the organization deal with thousands, maybe even millions of customers - can it cope? Does it want to devote huge resources here or would it prefer to utilize someone else's resources in return for a slice of the
  79. 79. 78 profits? Difficult marketing dilemmas which make distribution strategy both critical and interesting. The sections on Distribution Channels explore this in more detail. Selecting members within a channel Having decided to go through intermediaries the next question is whether to use agents or distributors and also how many. Unlike distributors, agents don't hold stocks - they only act as sales agents finding customers, collecting orders and passing them on to the supplier in return for a percentage commission. How would you select a distributor or an agent? Here are some criteria: 1. Market Coverage, 2. Sales Forecast, 3. Cost, 4.Other Resources, 5.Profitability, 6.Control, 7.Motivation, 8.Reputation, 9.Competition, 10. Contracts 1. Market Coverage: - does the profile of existing customers match your target market profile? is the number of customers big enough to meet the required distribution penetration? - is the existing sales force big enough to cover the territory? - are they dependent on a single individual? - are the existing delivery fleet and warehouse facilities adequate? 2. Sales Forecast: How many can they sell? What are their forecasts based upon? Do they give a 'best, worst and average' forecast? Will they invest in large stock commitment? Do they have budgets to run promotions? Some suppliers even ask their distributors for a marketing plan showing how they intend to market the supplier's products. 3. Cost: What will it cost in terms of discounts, commissions, stock investment and marketing support? 4. Other Resources: Does the target market require anything special such as technical advice, installation, quick deliveries, instant availability? If so can the distributor provide it? 5. Profitability: How much profit will the distributor generate for the supplier? 6. Control: Do they have a reporting system in place? How do they deal with problems? How often are review meetings scheduled? Can you influence the way they present your products? 7. Motivation: Does the agent or distributor convey a sense of excitement and enthusiasm about the product? What about its sales force - what's their reaction?
  80. 80. 79 8. Reputation: Has it got a good track record? This includes the number of years in business, growth and profit record, solvency, general stability and overall reliability. Is it dependent on one key player? 9. Competition: Do they distribute any competitor's products? 10. Contracts: Some distributors demand exclusivity. Some agreements tie the supplier in for certain periods of time. Check for flexibility in case things go wrong. The bottom line is: Can the agent or distributor be motivated, controlled and trusted? Motivated to sell your product among a range of others. Controlled to fee back results or change strategy if requested. And trusted to act as a reliable ambassador of your product? Motivating Channel Members Maintaining continually high levels of motivation among intermediaries presents a challenge. It requires a reasonable quality product, creative promotions, product training, joint visits between producer and distributor, co-operative advertising, merchandising and display. Most of these apply to agents as much as distributors and retailers. Keeping the intermediary stimulated is important. Positive motivators, like sales contests are preferred to negative motivators like sanctions such as reduced discounts and the threat of terminating the relationship. A positive reward works better than a negative punishment. Ideally there should be a shared sense of responsibility - a partnership - a strategic partnership. The supplier and intermediary are there to help each other. Vertical Marketing Systems are a good example. Clear communications, covering sales goals, review meetings, reporting procedures, marketing strategy, training , market information required, suggestions for improvements, all help. Regular contact through visits, review meetings, dinners, competitions, newsletters, thank you letters, congratulatory awards all help to keep everyone working closely together.
  81. 81. 80 These are all non-financial incentives which provide a form of psychic income as opposed to financial income. That's not to say that financial incentives aren't useful motivators, it just means that there are other motivations there too. In fact the money spent on financial incentives is often spent more effectively when the sales person is rewarded with a plaque, a gold pen or a holiday in the Bahamas rather than just the cash which tends to get soaked up and lost in a sea of ordinary household daily expenditure. Non cash rewards appeal to the higher levels of Maslow's Hierarchy of Needs - belonging, esteem and self -actualization. Despite this, conflict can occur when too many distributors are appointed within close proximity of each other, or the producer engages in a multiple channel strategy of direct marketing as well as marketing through intermediaries. Carefully motivating distributors is vital if goods are to flow smoothly through the channel and reach satisfied customers. (http://mmclearning.com/) Figure : 11 (Competencies of key account managers : Diana Woodburn)
  82. 82. 81 Figure : 12 (The development of blueprint for a key account management strategy to differentiate businesses in the beverage industry: Pieter Ernst Kruger )
  83. 83. 82 CORRELATION TO THE CONCEPT OF MARKETING MIX Product: A channel member takes into consideration the following parameters:  Which needs does the product satisfy?  What are its features?  How renowned is the company and the brands it offers?  To what degree it is superior or inferior to its competitors?  What is the USP of the product(s)? Price: The pricing schemes for the new channels should be attractive enough to suit the pockets of the channel members. Nobody wants to burn a hole in his pocket & no business ever has been done abandoning the purpose of profit making. The 'reference value' (where the consumer refers to the prices of competing products) and the 'differential value' (the consumer's view of this product's attributes versus the attributes of other products) must be taken into account. Each brand of coca cola has adifferent pricing strategy. Beverage market is said to be an oligopoly market (few sellers and large buyers), hence they form into cartel contract to ensure a mutual balance in pricing between the sellers.
  84. 84. 83 Place: Refers to the channels, the coverage, the supply chain etc. Timely delivery of the products must be ensured. The concept of "place" has been generally replaced by distribution in the marketing mix system. Distribution means getting products to customers in a strategic way. CocaCola's distribution process is a key element of its offering. The company's products are available in cans and bottles in supermarkets and other retail stores around the world. Additionally, the company provides supplies for fountain drinks in many restaurants. It sells its products in thousands of pop vending machines placed in businesses and public buildings. The ease and convenience of getting to the product is important to customer loyalty. Coca cola is the world‟s most favorite brand and is available all over the world. The distribution system of coca cola follows the FMCG distribution pattern. The effective distribution network of Coke has almost eroded the small and middle level players in the market. Promotion: Word-of-mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum. The company can utilize the people involved in the new channels in the promotional activities. One of the respondents, Rath caterer came up an innovative concept.Amul ice cream company asked the caterers who served the ice cream in certain functions, to put up Amul ice cream boards, the catering people were suppliedwith the brand`s T-shirts &were asked to serve the
  85. 85. 84 ice cream. In this way, the consumers present at the party become aware of the brand`s presence. The very same concept can be used as a promotion strategy by the company taking the help of the new channels. While serving beverages to the guests, the catering people can don the company`s T- shirts, caps and serve beverages to the guests. The mock-tail section can put up Coca Cola boards in the vicinity informing the consumers that CocaCola`s products are being served here. By the side, different brands in demand like Thums Up, Maaza, Fanta, Sprite can be displayed to increase the visibility of the company & the company`s products. This will definitely push the sale of the beverages. CocaCola invests billions of dollars a year in advertising and promotions around the world to maintain its position of industry leadership against rival Pepsi. Pepsi increased its TV ad budget by 30 percent in 2011 when it fell behind Diet Coke. CocaCola spends a good portion of its ad budget on television advertising. It has used polar bear characters and a message of nostalgia and tradition as part of its branding over time. Magazine ads, online and social media have also been used as media for Coca-Cola marketing. Sales promotions at the store are used to drive revenue during slow periods. CocaCola adopts various advertising and promotional strategies to create an increased demand in the market by associating with life style and behavior and mainly targeting value based advertising. CocaCola uses CSR as its marketing tool to gain emotional benefits in consumers` minds. It allows price discounts and allowances to distributors and retailers in order to push moreproducts into the market. It employs both push strategy through promotions and pull strategy through advertisements and campaigns.
  86. 86. 85 People: The individuals involved in the sale and purchase of products or services come under people. The human resource engaged in the beverage business can be motivated by various ways to push the sale the sale of CocaCola`s beverages. Process: Process includes the various mechanisms and procedures which help the product to finally reach its target market. The processes should ensure that the beverages reach the target market in adequate amounts, that too well before time ( before any shortage in the stock occurs ). Physical evidence: With the help of physical evidence, a marketer tries to communicate the USPs and benefits of a product to the end users. CocaCola can utilize this concept in its fruit juice and mineral water brands to boost their sales. OBJECTIVES OF THE STUDY The study took into consideration the below mentioned objectives:  To explore the opportunities associated with the emerging channels.  To analyze the gaps  To find out techniques which can optimize the sales  To understand customer relationships ( Customer Relationship Management )
  87. 87. 86 SCOPE OF THE STUDY  The study aimed to explore the opportunities associated within the emerging channels in Coca Cola beverages in the Bhubaneswar market.  The caterers and event management organizations have been dealing with beverages since a few years. This concept is new to the Bhubaneswar market. The results obtained from this research will help the company decide whether to include the caterers and event management organizations in its channel system or not.  This report provides an insight to the problems faced by the caterers and event management organizations who are already dealing with the CocaCola beverages. The company should think of ways how to deal with the problems of the existing customers and manage those effectively to maintain its goodwill and to continue being the market leader in the beverage industry.  The study provided the scope to collect, analyze & interpret the data providing a chance to experiment as well as learn.
  88. 88. 87 SIGNIFICANCE OF THE STUDY To the Researcher The study provided a chance to utilize my conceptual knowledge in the actual work environment & prepared me to use the same in my future endeavors. It provided me the scope to collect, analyze & interpret the data on my own, providing me a chance to experiment as well as learn. The study was essential for me in the partial fulfillment of the PGDM curriculum. It enriched me with the experience to conduct survey. To the Company Branded beverage companies are facing tough competition. The study provides an insight to the company regarding the opportunities associated with the emerging channels & how to utilize the opportunities to reap benefits. To Others The study`s based on the research findings for Coca Cola beverages. Any student / researcher undertakes research on this particular topic or anything related to this particular topic may use this project report as a source of secondary data / reference.