Summer Internship Project on Coca-Cola


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This project is been done with an intention to find the effects of Marketing Campaigns on Sales Promotion for Coca-Cola products.

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Summer Internship Project on Coca-Cola

  1. 1. 1 A PROJECT REPORT ON “STUDY ON ROLE OF MARKETING CAMPAIGNS IN SALES PROMOTION OF COCA-COLA BEVERAGES” FOR Hindustan Coca-Cola Beverages Pvt. Ltd. Submitted to Marwadi Education Foundation’s Group of Institutions In partial fulfillment of the requirement of the award for the degree of Master of Business Administration Under Gujarat Technological University Under the guidance of Faculty Guide: Company Guide: Prof. Amar Gandhi Mr. Sagar Trivedi Submitted by PRASHANT T. AGHARA Enrolment No.:128270592002 MBA Semester III Marwadi Education Foundation‟s Group of Institutions MBA Program Affiliated to Gujarat Technological University Ahmedabad July 2013 SUMMER INTERNSHIP PROJECT [SIP]-2013
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  4. 4. 4 DECLARATION I Prashant T. Aghara hereby declare that the report for „Summer Training Project‟ entitled “STUDY ON ROLE OF MARKETING CAMPAIGNS IN SALES PROMOTION OF COCA-COLA BEVERAGES” Is a result of my own work and my indebtedness to other work publications, references, if any, have been duly acknowledged. I am presenting an authentic report of my work to Marwadi Education Foundation‟s Group of Institutions, Rajkot carried out at Hindustan Coca-Cola Beverages Private Limited, Rajkot for the partial fulfillment of the requirement of Master of Business Administration degree program of Gujarat Technological University, Ahmedabad. Place: Rajkot Student Signature Date: PRASHANT T. AGHARA
  5. 5. 5 PREFACE It is said that “Knowledge is power” but “applied knowledge is power” seems to be a correct statement. In this modern world, theoretical study has no value without its practical application; practical knowledge is more powerful than the knowledge of books. In today‟s business world, practical knowledge plays an important role; course involves industrial training, which provides practical knowledge and experience to the students in the field of management. Keeping the same in mind Marwadi Education Foundation’s Group of Institutions has introduced practical outlook to well known organizations and to make the students familiar with the practical managerial functions, the institution arranged Summer Internship Program at Hindustan Coca-Coca Beverage Private Limited (HCCBPL), Rajkot (Guj). Research is a feedback that any organization sought for the purpose of effective policies and decision making. It is the systematic problem analysis, model building & fact finding for the purpose of important decision-making & control in making of goods and services. Summer Project is a part of our curriculum so that we get exposed to the practical side of our theoretical know-how. This is basically designed to the real life situation. In this training program, the students use their academic knowledge practically which polishes the decision making abilities of MBA students. For developing healthy managerial and administrative skills of potential managers .It is necessary that theoretical knowledge must be supplemented with exposure to real life business environment. It is a practical training that the measuring itself is realized.
  6. 6. 6 ACKNOWLEDGEMENT This is a great pleasure to submit this report. I would like to express my profound gratitude to all those who have been instrumental in the preparation of this “Summer Internship Project Report”. First of all, I wish to place on records, my deep gratitude to our Placement Head Mr. K.S.R. Swami and other staff of this department, for giving me a chance to sit in selection interview of my SIP. I am also very much thankful to Mr Suresh Ahluwalia(Sales HR, HCCBPL) and Ujjwal sir for selecting me as an intern and giving me a chance to prove myself. I am highly obliged to my project guide Prof. Amar Gandhi for giving me a valuable and timely guidance throughout my SIP and I also like to thank our dean Mr. S.C. Reddy for granting me a permission to join my training during lectures. I will always be much thankful to my company guide Mr. Sagar Trivedi for his major support, co-operation and attentiveness during my training. I also would like to thank all Marketing and Sales staff of HCCBPL at rajkot, without whom my training might not have been completed and I am thankful to all my friends with whom I have been working, for all kind of help in completion of my “Summer Internship Project”. My gratitude will not be completed without thanking my parents and all my well-wishers for being a source of motivation and their suggestions towards my betterment.
  7. 7. 7 INDEX Sr. No. Particulars Page No. PART-I General Information 1. Industry Overview 8 1.1: Beverage Industry in India 10 1.2: Growth And Performance of Industry 12 1.3: Major Market Players in Industry 15 2. Company Overview 16 2.1: History: Coca-Cola- International 16 2.2: History: Coca-Cola - INDIA 26 2.3: Coca-Cola System Worldwide and in India 28 2.4: About Hindustan Coca-Cola Beverages Pvt. Ltd. 30 2.5: Hierarchy of the Organization 33 2.6: Growth and Development 34 2.7: Performance Highlights (Jan 2013) 36 2.8: Product Profile 38 2.9: Departmental Overview 40 2.10: SWOT Analysis 48 2.11: About Competitors 50 PART-II Research Work 3. Introduction of the Study 52 3.1: Background of The Study 52 3.2: Statements of The Problems 52 3.3: Objectives of the Study 53 4. Research Methodology 54 4.1: Introduction 54 4.2: Research Design 54 4.3: Scope of The Study 55 4.4: Data Collection 55 4.5: Instrument for Data Collection 56 5. About Marketing Campaigns 57 5.1: Campaign 1: “Shop in Shop Activity” 59 5.1.6: Data Analysis and Interpretation of S-I-S 63 5.1.7: Result and Findings 65 5.2: Campaign 2: “Horizontal Expansion” 67 5.2.5: Result and Findings 73 6. Suggestions and Recommendations 76 7. Limitations of The Study 77
  8. 8. 8 8. Conclusion 78 10. Bibliography 79 11. Annexure 80 CHART INDEX Chart No. Chart Name Page No. 1. Avg. bottle sold per day before and after S-I-S Activity at each outlet. 65 2. Total avg. selling per day before, during and after S-I-S Activity. 66 3. Revenue generated from the 1st order for particular distributor 74 TABLE INDEX Table no. Table Name Page No. 1. Worksheet of Shop-In-Shop Activity 63
  9. 9. 9 PART-I: General Information “Study on Role of Marketing Campaigns in Sales Promotion of Coca-Cola Beverages”
  10. 10. 10 CHAPTER: 1- INDUSTRY OVERVIEW FMCG Industry Fast Moving Consumer Goods (FMCG) goods are all consumable items (other than groceries/pulses) that one needs to buy at regular intervals. These are items which are used daily, and so have a quick rate of consumption, and a high return. FMCG can broadly be categorized into three segments which are: 1. Household items as soaps, detergents, household accessories, etc, 2. Personal care items as shampoos, toothpaste, shaving products, etc and finally 3. Food and Beverages as snacks, processed foods, tea, coffee, edible oils, soft drinks etc. Global leaders in the FMCG segment are Nestlé, ITC, Hindustan Unilever Limited, Reckitt Benckiser, Unilever, Procter & Gamble, Coca-Cola, Carlsberg, Kleenex, General Mills, Pepsi, Gillette etc. Overview: The burgeoning middle class Indian population, as well as the rural sector, presents a huge potential for this sector. The FMCG sector in India is at present, the fourth largest sector with a total market size in excess of USD 13 billion as of 2012. This sector is expected to grow to a USD 33 billion industry by 2015 and to a whooping USD 100 billion by the year 2025. This sector is characterized by strong MNC presence and a well established distribution network. In India the easy availability of raw materials as well as cheap labor makes it an ideal destination for this sector. There is also intense competition between the organized and unorganized segments and the fight to keep operational costs low.
  11. 11. 11 A look at some factors that will drive growth in this sector:  Increasing rate of urbanization, expected to see major growth in coming years.  Rise in disposable incomes, resulting in premium brands having faster growth and deeper penetration.  Innovative and stronger channels of distribution to the rural segment, leading to deeper penetration into this segment.  Increase in rural non-agricultural income and benefits from government welfare programs.  Investment in stock markets of FMCG companies, which are expected to grow constantly. Some of the challenges this sector is likely to face are:  Increasing rate of inflation, which is likely to lead to higher cost of raw materials.  The standardization of packaging norms that is likely to be implemented by the Government by 2013 is expected to increase cost of beverages, cereals, edible oil, detergent, flour, salt, aerated drinks and mineral water.  Steadily rising fuel costs, leading to increased distribution costs.  The present slow-down in the economy may lower demand of FMCG products, particularly in the premium sector, leading to reduced volumes.  The declining value of rupee against other currencies may reduce margins of many companies, as Marico, Godrej Consumer Products, Colgate, Dabur, etc who import raw materials.
  12. 12. 12 In conclusion: This sector will continue to see growth as it depends on an ever-increasing internal market for consumption, and demand for these goods remains more or less constant, irrespective of recession or inflation. Hence this sector will grow, though it may not be a smooth growth path, due to the present world- wide economic slowdown, rising inflation and fall of the rupee. This sector will see good growth in the long run and hiring will continue to remain robust. 1.1: Beverage Industry in INDIA: A BRIEF INSIGHT 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 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 BEVERAGES Alcoholic Non-Alcoholic Carbonated Non-Carbonated Cola Non-Cola Non-Cola
  13. 13. 13  In-home consumption and out of home on premises consumption.  Age wise segmentation i.e. beverages for kids, for adults and for senior citizens  Segmentation based on the amount of consumption i.e. high levels of consumption and low levels of consumption. If the 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.  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.
  14. 14. 14 1.2: Growth and Performance of Beverage Industry “Indian beverage industry's double-digit growth will continue, says IBA” April 13, 2013 The Indian Beverage Association (IBA) expects the country's beverage industry to continue to grow in double digits in 2013, despite the recessionary trends being shown by most economies the world over, including the Indian economy. Speaking at an IBA-organised seminar titled 'Agenda for Growth: Indian Beverage Industry – Leveraging International Practices' in Delhi, experts from the beverage industry stated that it could witness a revolution, fuelled by changing lifestyles, a growing middle-class, rapid urbanisation and increased disposable incomes. Participants in the seminar included Rakesh Kacker, secretary, Ministry of Food Processing Industries, Government of India; K Chandramouli, chairman, Food Safety and Standards Authority of India (FSSAI); Geoff Parker, president, International Council of Beverages Associations, and Patricia Vaughan, senior vice-president, American Beverage Association. The non-alcoholic ready-to-drink beverage segment has been growing at a compound annual growth rate (CAGR) of 13 per cent since 2009, and is one of the segments that have defied the slowing economic growth. Arvind Varma, secretary general, IBA, said, "The non-alcoholic ready-to-drink beverage industry is one of the largest investors in the country and has contributed significantly to the growth of allied industries. This industry is witnessing robust growth, driven by a combination of factors such as increased investments and innovations.” “However, the government needs to take a long-term view on the industry while formulating policies or else there is a chance this industry‟s growth may get derailed,” he stated. “IBA aims to act as a catalyst to enable the non-alcoholic beverage industry to play an increasingly significant role in the growth of the economy, by providing
  15. 15. 15 employment opportunities and driving income growth and therefore has raised its expectations with the government authorities,” Varma added. IBA's suggestions At the deliberations in the seminar, speakers observed that the macro- indicators and the demographic dividends favour robust growth for the beverage industry in India. “With an enabling policy regime, which includes a more rational tax structure, frequent consultations with the industry on food regulations, giving the industry its due recognition as manufacturers of high quality, healthy and nutritious products as well as life-critical products like water, will further help the industry realize its potential,” IBA stated. As an industry that has strong backward linkages with agriculture, its growth will also benefit millions of farmers across the country. GST One of the key areas where the beverage industry expects central and state government intervention is goods and service tax (GST) and direct tax code (DTC). The beverage industry has learnt that a single rate for both Central GST and state GST, which was proposed earlier, is reportedly being talked about as three different rates. This defies economic logic and is indicative of difficulty in moving forward the proposal of a Constitutional amendment in Parliament. IBA also suggested that the beverage industry be made a key stakeholder in the introduction of GST, and should be a natural partner in the process of consultation while formulating the plan and roll-out of GST. The extent of involvement of industry currently in the consultation process needs to be scaled up and made more intense and frequent. VAT The value-added tax (VAT) rate of six per cent is applicable to fruit juice and fruit juice-based drinks. Despite the states coming to an understanding that
  16. 16. 16 VAT would be charged at the rate of six per cent on fruit juice and fruit juice- based drinks, some states have increased the VAT substantially. The move to increase VAT on fruit juice and fruit juice-based drinks will subvert the growth of the juice industry as also the development of the fruit and vegetable processing industry. The soft drink industry is already reeling under margin pressure due to the high rate of taxes it is paying to the Central and state governments, but some states have also increased the VAT on carbonated soft drinks. This increase in taxes will, therefore, have to be passed on to the consumer leading to an increase in the price of the soft drinks, which will restrict purchase of soft drinks by the general mass. This, in turn, will have an adverse effect on the beverage industry and industries that depend on the beverage industry. An increase in price also favors spurious manufacturers to sell their products on the basis of cost arbitrage. R&D Industry players also felt that their prowess in research and development would help them move beyond global brands and develop local, indigenous product to suit regional palates, thereby driving further growth in the market. These innovations are meant to address the low per-capita consumption of packaged beverages and will create both a direct and an indirect impact. Regulatory aspect The industry also expects that the food safety authorities remove roadblocks and provide much faster clearances and approvals on ingredients and new products, without compromising the safety and quality of new products. This is most relevant in case of proprietary foods, where inordinate delays result in food and beverage companies having to wait for many months before launching new products.
  17. 17. 17 IBA also suggested that CODEX should be made a reference point for national food control agencies. The international food standards, guidelines and codes of practice laid down by CODEX contribute to the safety, quality and fairness of international food trade. Referring to CODEX will help the Indian beverage industry contribute a higher share to the global food and beverage trade, which is estimated at $200 billion dollars. 1.3: Major Market Players in Industry Followings are major players in beverage industry: 1. The Coca-Cola Company 2. PepsiCo 3. Nestlé 4. Suntory Holdings (Suntory) 5. Dr Pepper Snapple (DPS) 6. Red Bull 7. Groupe Danone (Danone) 8. Kirin Holdings (Kirin) 9. Asahi Breweries (Asahi)
  18. 18. 18 CHAPTER: 2-COMPANY OVERVIEW 2.1: History: Coca-Cola Company- INTERNATIONAL Coca-Cola Enterprises, established in 1886, is a young company by the standards of the Coca-Cola system. Yet each of its franchises has a strong heritage in the traditions of Coca-Cola that is the foundation for this Company. The Coca-Cola Company traces it‟s beginning to 1886, when an Atlanta pharmacist, Dr. John Pemberton, began to produce Coca-Cola syrup for sale in fountain drinks. However the bottling business began in 1899 when two Chattanooga businessmen, Benjamin F. Thomas and Joseph B. Whitehead, secured the exclusive rights to bottle and sell Coca-Cola for most of the United States from The Coca-Cola Company. The Coca-Cola bottling system continued to operate as independent, local businesses until the early 1980s when bottling franchises began to consolidate. In 1986, The Coca-Cola Company merged some of its company- owned operations with two large ownership groups that were for sale, the John T. Lupton franchises and BCI Holding Corporation's bottling holdings, to form Coca-Cola Enterprises Inc. The Company offered its stock to the public on November 21, 1986, at a split-adjusted price of $5.50 a share. On an annual basis, total unit case sales were 880,000 in 1986. In December 1991, a merger between Coca-Cola Enterprises and the Johnston Coca-Cola Bottling Group, Inc. (Johnston) created a larger, stronger
  19. 19. 19 Company, again helping accelerate bottler consolidation. As part of the merger, the senior management team of Johnston assumed responsibility for managing the Company, and began a dramatic, successful restructuring in 1992.Unit case sales had climbed to 1.4 billion, and total revenues were $5 billion. The Coca-Cola Company is the world‟s largest beverage company. They operate in more than 200 countries & markets more than 3500 beverage products. Headquartered at Atlanta, Georgia, they have approximately 146,200 employees all over the world. It is often referred to simply as Coke or (in European and American countries) as Cola or Pop. 2.1.1- Heritage timeline: 1886-1892: It was 1886, and in New York Harbor, workers were constructing the Statue of Liberty. Eight hundred miles away, another great American symbol was about to be unveiled. 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, Coca-Cola is written the same way. In the first year, Pemberton sold just 9 glasses of Coca-Cola a day. A century later, The Coca-Cola Company has 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.
  20. 20. 20 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 Coca-Cola from an invention into a business. He knew there were thirsty people out there, and Candler found brilliant and innovative ways to introduce them to this exciting new refreshment. He gave away coupons for complimentary first tastes of Coca-Cola, and outfitted distributing pharmacists with clocks, urns, calendars and apothecary scales bearing the Coca-Cola brand. People saw Coca-Cola everywhere, and the aggressive promotion worked. By 1895, Candler had built syrup plants in Chicago, Dallas and Los Angeles. Inevitably, the soda's popularity led to a demand for it to be enjoyed in new ways. In 1894, a Mississippi businessman named Joseph Biedenharn became the first to put Coca-Cola 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 Coca-Cola 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 the sum of only one dollar. 1905-1918: Imitation may be the sincerest form of flattery, but The Coca-Cola 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 Coca-Cola, 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 Coca-Cola. The Root Glass Company of Terre Haute, Indiana, won a contest to design a bottle that could be
  21. 21. 21 recognized in the dark. In 1916, they began manufacturing the famous contour bottle. The contour bottle, which remains the signature shape of Coca-Cola today, was chosen for its attractive appearance, original design and the fact that, even in the dark, you could identify the genuine article. As the country roared into the new century, The Coca-Cola 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 Coca-Cola 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 Coca-Cola, 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 Coca-Cola overseas and in 1928 introduced Coca-Cola to the Olympic Games for the first time when Coca- Cola 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 Coca-Cola at home or away. This new thinking made Coca-Cola not just a huge success, but a big part of people's lives. 1941-1959: In 1941, America entered World War II. Thousands of men and women were sent overseas. The country, and Coca-Cola, rallied behind them. Woodruff ordered that "every man in uniform gets a bottle of Coca-Cola for 5 cents, wherever he is, and whatever it costs the Company." In 1943, General Dwight D. Eisenhower sent an urgent cablegram to Coca-Cola, requesting shipment of materials for 10 bottling plants. During the war, many people enjoyed their
  22. 22. 22 first taste of the beverage, and when peace finally came, the foundations were laid for Coca-Cola to do business overseas. Woodruff‟s vision that Coca-Cola 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. Coca-Cola 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. 1960-1981: After 70 years of success with one brand, Coca-Cola®, 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 Coca-Cola 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, Coca-Cola found a home in more and more places: Cambodia, Montserrat, Paraguay, Macau, Turkey and more. Advertising for Coca-Cola, 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. The international appeal of Coca- Cola was embodied by a 1971 commercial, where a group of young people from all over the world gathered on a hilltop in Italy to sing "I'd Like to Buy the World a Coke." In 1978, The Coca-Cola Company was selected as the only Company allowed to sell packaged cold drinks in the People's Republic of China.
  23. 23. 23 1982-1989: The 1980s -- the era of legwarmers, headbands and the fitness craze, and a time of much change and innovation at The Coca-Cola Company. In 1981, Roberto C. Goizueta became chairman of The Board of Directors and CEO of The Coca-Cola Company. Goizueta, who fled Castro's Cuba in 1961, completely overhauled the Company with a strategy he called "intelligent risk taking." Among his bold moves was organizing the numerous U.S. bottling operations into a new public company, Coca-Cola Enterprises Inc. He also led the introduction of diet Coke®, the very first extension of the Coca-Cola trademark; within two years, it had become the top low-calorie drink in the world, second in success only to Coca-Cola. One of Goizueta's other initiatives, in 1985, was the release of a new taste for Coca-Cola, 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 formula was returned to the market as Coca-Cola classic®, and the product began to increase its lead over the competition -- a lead that continues to this day. 1990-1999: The 1990s were a time of continued growth for The Coca-Cola 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. Coca- Cola 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 Coca-Cola" advertising campaign, and the world met the lovable Coca-Cola Polar Bear for the first
  24. 24. 24 time. New markets opened up as Coca-Cola 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 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-Now: In 1886, Coca-Cola® 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. Coca-Cola 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 Coca-Cola. Coca-Cola 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 Coca-Cola exists to benefit and refresh everyone it touches. From the early beginnings when just nine drinks a day were served, Coca- Cola has grown to the world‟s most ubiquitous brand, with more than 1.7 billion beverage servings sold each day. When people choose to reach for one of The Coca-Cola Company brands, the Company wants that choice to be exciting and satisfying, every single time.
  25. 25. 25 2.1.2: Mission, Vision and Values (Global) 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 "Road map" for winning together with our bottling partners. Our Mission: Our Road map 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. Our Vision: Our vision serves as the framework for our Road map 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
  26. 26. 26  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 share owners while being mindful of our overall responsibilities  Productivity: Be a highly effective, lean and fast-moving organization Our Winning Culture: Our Winning Culture defines the attitudes and behaviors that will be required of us to make our 2020 Vision a reality. Live Our Values: Our values serve as a compass for our actions and describe how we behave in the world.  Leadership: The courage to shape a better future  Collaboration: Leverage collective genius  Integrity: Be real  Accountability: If it is to be, it‟s up to me  Passion: Committed in heart and mind  Diversity: As inclusive as our brands  Quality: What we do, we do well Focus on the Market:  Focus on needs of our consumers, customers and franchise partners  Get out into the market and listen, observe and learn  Possess a world view
  27. 27. 27  Focus on execution in the marketplace every day  Be insatiably curious Work Smart:  Act with urgency  Remain responsive to change  Have the courage to change course when needed  Remain constructively discontent  Work efficiently Act like Owners:  Be accountable for our actions and in actions  Steward system assets and focus on building value  Reward our people for taking risks and finding better ways to solve problems  Learn from our outcomes -- what worked and what didn‟t Be the Brand:  Inspire creativity, passion, optimism and fun
  28. 28. 28 2.2: History: Coca-Cola - INDIA The Coca-Cola Company re-entered India through its wholly owned subsidiary, Coca-Cola India Private Limited and re-launched Coca-Cola in 1993 after the opening up of the Indian economy to foreign investments in 1991. Since then its operations have grown rapidly through a model that supports bottling operations, both company owned as well as locally owned and includes over 7,000 Indian distributors and more than 2.2 million retailers. Today, our brands are the leading brands in most beverage segments. The Coca-Cola 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 (a beverage fortified with micro-nutrients). In India, the Coca-Cola system comprises of a wholly owned subsidiary of The Coca-Cola Company namely Coca-Cola India Pvt Ltd which manufactures and sells concentrate and beverage bases and powdered beverage mixes, a Company-owned bottling entity, namely, Hindustan Coca- Cola Beverages Pvt. Ltd; thirteen authorized bottling partners of The Coca- Cola Company, who are authorized to prepare, package, sell and distribute beverages under certain specified trademarks of The Coca-Cola Company; and an extensive distribution system comprising of our customers, distributors and retailers. Coca-Cola India Private Limited sells concentrate and beverage bases to authorized bottlers who are authorized to use these to produce our portfolio of beverages. These authorized bottlers independently develop local markets and distribute beverages to grocers, small retailers, supermarkets, restaurants and numerous other businesses. In turn, these customers make our beverages available to consumers across India. The Coca-Cola system in India has already invested USD 2 Billion till 2011, since its re-entry into India. The company will be investing another USD 5 Billion till the year 2020. The Coca-Cola system in India directly employs over 25,000 people including those on contract. The system has created indirect
  29. 29. 29 employment for more than 1,50,000 people in related industries through its vast procurement, supply and distribution system. We strive to ensure that our work environment is safe and inclusive and that there are plentiful opportunities for our people in India and across the world. The beverage industry is a major driver of economic growth. A National Council of Applied Economic Research (NCAER) study on the carbonated soft-drink industry indicates that this industry has an output multiplier effect of 2.1. This means that if one unit of output of beverage is increased, the direct and indirect effect on the economy will be twice of that. In terms of employment, the NCAER study notes that "an extra production of 1000 cases generates an extra employment of 410 man days." As a Company, our products are an integral part of the micro economy particularly in small towns and villages, contributing to creation of jobs and growth in GDP. Coca-Cola in India is amongst the largest domestic buyers of certain agricultural products. As an industry which has strong backward and forward linkages, our operations catalysis growth in demand for products like glass, plastic, refrigeration, transportation, and Industrial and agricultural products. Our operations also lead to incremental growth for enterprises engaged in post- production activities like merchandising, marketing and sales. In addition, we share best practices and technological advancements with our suppliers, vendors and allied industries which often lead to improvement in the overall standards of quality across industries. The Coca-Cola Company has always placed high value on good citizenship. Our basic proposition entails that our Company's business should refresh the market; enrich the workplace; protect and preserve the environment; and strengthen the community. We leverage our unique strengths to actively support and respond to local needs -- be it the need for education, health, water or nutrition. We have used our distribution network for disaster relief,
  30. 30. 30 our marketing prowess to raise awareness on issues such as PET recycling, and our presence in communities to improve access to education and potable water. The Coca-Cola India Foundation is now taking forward in the community at large, projects and programs of social relevance to carry forward the message of inclusive growth and development. 2.3: Coca-Cola System Worldwide and in India At the core of our business in India, as in the rest of the world is our production and distribution network, which we call the “Coca-Cola system”. Globally, the Coca-Cola system includes our Company and more than 300 bottling partners. The Coca-Cola Company manufactures and sells concentrate and beverage bases. Our authorized bottlers combine our concentrate or beverage bases as the case may be with sweetener (depending on the product), water or carbonated water to produce finished beverages. These finished beverages are packaged in authorized containers bearing our trademarks -- such as cans, refillable glass bottles, non-refillable PET bottles and tetra packs -- and are then sold to wholesalers or retailers. In India, additionally, the Company also sells certain powdered beverage mixes such as Vitingo. Our beverages reach our ultimate consumers through our customers: the grocers, small retailers, hypermarkets, restaurants, convenience stores and millions of other businesses that are the final points of distribution in the Coca- Cola system. What truly defines the Coca-Cola system, and indeed what makes it unique among businesses, is our ability to create value for our customers and consumers. In India, the Coca-Cola system comprises of a wholly owned subsidiary of The Coca-Cola Company namely Coca-Cola India Pvt Ltd which manufactures and sells concentrate and beverage bases and powdered beverage mixes, a Company-owned bottling entity, namely, Hindustan Coca- Cola Beverages Pvt Ltd; thirteen authorized bottling partners of The Coca- Cola Company, who are authorized to prepare, package, sell and distribute beverages under certain specified trademarks of The Coca-Cola Company;
  31. 31. 31 and an extensive distribution system comprising of our customers, distributors and retailers. Coca-Cola India Private Limited sells concentrate and beverage bases to authorized bottlers who are authorized to use these to produce our portfolio of beverages. These authorized bottlers independently develop local markets and distribute beverages to grocers, small retailers, supermarkets, restaurants and numerous other businesses. In turn, these customers make our beverages available to consumers across India.
  32. 32. 32 2.4: About “Hindustan Coca-Cola Beverages Private Limited” Overview: HCCBPL is the largest bottling partner of The Coca-Cola Company ( in India. It is a part of The Coca-Cola Company‟s Bottling Investments Group (BIG) and responsible for the manufacture, package, sale and distribution of beverages under the trademarks of The Coca-Cola Company. Coca-Cola India Pvt. Ltd. - ( is a Wholly-Owned Subsidiary of The Coca-Cola Company, USA. While building the consumer franchise for The Coca-Cola Company trademarks, it also leads world class governance systems for the operations of all partners in bottling, suppliers, distributors and other stakeholders.
  33. 33. 33 Hindustan Coca-Cola Beverages Pvt. Ltd. - As part of the Bottling Investments Group of The Coca-Cola Company, HCCBPL has 24 bottling plants at strategic locations in various states spread across India. We cover approximately 65% of bottling operations for the Coca-Cola System in India. HCCBPL has an extensive distribution system spanning more than a million outlets operating with world class execution standards. The focus of the system is to develop strong customer value while delivering preferred choice of refreshment at an arm's length of desire to the consumer. Over the years, Hindustan Coca-Cola Beverages Pvt. Ltd. has focused on building world class operations based on principles of safety, profitability and solid governance to claim sustained growth. As part of our journey of moving towards being a World Class Company, we have strengthened our organization in terms of Supply Chain, Infrastructure, Market Execution, People, Processes, Compliance, Governance and Route-to-Market. This approach has enabled us to build our portfolio through launching new packs and brands, coupled with a competitive pricing strategy based on a balance of value pricing and eliminating waste.
  34. 34. 34 2.4.1: Vision, Mission and Values of HCCBPL:
  36. 36. 36 2.6: Growth and Development: First Quarter 2013 Highlights:  Solid 4% first quarter global volume growth. Volume growth of 3% for Coca-Cola Americas and 5% for Coca-Cola International.  Global sparkling beverage volume grew 3%, led by brand Coca-Cola, up 3%, and global still beverage volume grew 6% in the first quarter.  First quarter reported net revenues declined 1%. Excluding the impact of currency and structural changes, net revenues grew 2% despite two fewer selling days in the quarter.  First quarter reported operating income declined 4% and comparable currency neutral operating income grew 5%, in line with our expectations and reflecting the impact of two fewer selling days in the quarter.  First quarter reported EPS was $0.39, down 13%, and comparable EPS was $0.46, up 5%, including a currency headwind of approximately 4%.  The Company announces implementation of a new partnership model in the United States. ATLANTA, April 16, 2013 – The Coca-Cola Company today reported first quarter 2013 results. Muhtar Kent, Chairman and Chief Executive Officer of The Coca-Cola Company said, "I am pleased with our first quarter performance results, having once again delivered solid growth against the backdrop of a still uncertain global economy. Guided by our 2020 Vision, our roadmap for winning together with our global system bottling partners, we enter 2013 and the fourth year of our journey to 2020 focused and on track to reach our goals. "Together, we are working to unlock value, to execute with excellence and to keep winning volume and value share. We proudly serve more than 500 brands through 23 million retail customer outlets each week, providing
  37. 37. 37 consumers a wide array of choices in package sizes, sweeteners and beverages – including more than 800 low- and no-calorie options. Our focus each and every day is to refresh the world, inspire moments of optimism and happiness, create value and make a meaningful difference. I am proud of all we are achieving alongside our customers, bottlers and other partners. Even so, we remain constructively discontent as we seek to make the most of the vast growth opportunities we continue to see around the world." Fig: Chart showing Revenue Growth of Coca-Cola
  38. 38. 38 2.7: Performance Highlights (Jan 2013): The Coca-Cola Company reported worldwide volume growth of 4% for the first quarter, with 3% growth in Coca-Cola Americas and 5% growth in Coca- Cola International. The Company reported solid volume growth in key developed markets, including Germany (+3%), North America (+1%) and Japan (+1%). Europe volume was even for the first quarter and a sequential improvement from fourth quarter 2012, despite ongoing uncertain macroeconomic conditions and unseasonably cold weather. The Company also delivered strong volume growth during the quarter in key emerging markets, including Thailand (+18%), India (+8%), Russia (+8%), Mexico (+3%) and Brazil (+3%). Our China business delivered 1% volume growth in the quarter, a sequential improvement from fourth quarter 2012, despite the economic slowdown and poor weather in the quarter. Strong volume growth continued in countries with per capita consumption of Company brands less than 150 eight-ounce servings per year, with volume up 7% in the quarter overall, reflecting the strength of our geographic portfolio, with our products sold in more than 200 countries worldwide. We grew value share in nonalcoholic ready-to-drink (NARTD) beverages for the 23rd consecutive quarter and we maintained global volume share in the quarter. Importantly, value share growth once again outperformed volume share. Further, our immediate consumption (IC) volume grew 3% globally in the first quarter, with sparkling IC volume up 2% and still IC volume up 3%, driven by focused in-store activation efforts and continued cold-drink equipment expansion, building on the 1.3 million units placed in 2012. Worldwide sparkling beverage volume grew 3% for the quarter. We grew volume and value share in global core sparkling beverages in the quarter, led once again by brand Coca-Cola, as we activated our "Crazy for Good" marketing campaign in many markets around the world and continued to offer consumers relevant price and package size choices as well as promotions centered on "Coke with Meals". Worldwide brand Coca-Cola volume grew 3% for the quarter, with growth across diverse markets, including Thailand (+38%), India (+30%), Russia (+15%), China (+6%), Germany (+4%), Japan
  39. 39. 39 (+2%) and Brazil (+2%). In addition, Fanta volume grew 6% and Sprite volume grew 5% for the quarter, reflecting a balanced portfolio approach to growth across the core sparkling beverage category. Growth was driven by innovation in sweeteners and packaging and activation of global marketing campaigns in locally relevant ways such as the Fanta "Play" campaign and the Sprite "Uncontainable Game" NBA partnership. Worldwide still beverage volume grew 6% in the quarter, with volume growth across most beverage categories, including ready-to-drink tea, juices and juice drinks, packaged water, energy drinks and sports drinks. Excluding the impact of acquired volume, primarily from the Aujan partnership in the Eurasia and Africa Group, still beverage volume grew 4% in the quarter. We grew global volume and value share in still beverages and realized volume and value share gains in juices and juice drinks, ready-to-drink tea, and packaged water. Ready-to-drink tea volume grew double digits in the quarter, with continued strong performance of key brands such as Gold Peak and Honest Tea in North America, Ayataka green tea in Japan and Fuze Tea, which we expanded across multiple markets worldwide during the quarter. Juices and juice drinks volume grew 9% in the quarter, with growth across all of our geographic operating groups as we continue to introduce a common visual identity across our portfolio of juice brands around the world. Energy drinks volume also grew 9% in the quarter. Packaged water volume grew 1% in the quarter, as we strengthened our focus on innovative and sustainable immediate consumption packaging to grow value in the category. Our two newest billion-dollar brands, I LOHAS single-serve water and Ayataka premium green tea, both in Japan, grew 22% and 13%, respectively, in the quarter, as we build on our strong history of brand innovation to capture growth opportunities across beverage categories and occasions in this important market. The Company now has 16 billion-dollar brands.
  40. 40. 40 2.8: Product Profile Different brands of company: The Coca-Cola Company offers a wide range of products to the customers including beverages, fruit juices and bottled mineral water. The Company is always looking to innovate and come up with, either complete new products or new ways to bottle or pack the existing drinks. The Coca-Cola Company has a wide range of products out of which the following products are marketed by HCCBPL: Product Name Image Coke Diet Coke Thums Up Sprite Fanta Limca
  41. 41. 41 Maaza Minute Maid Minute Maid Juices Burn Energy Drink Schweppes (Tonic Soda and Tonic Water) Georgia (Tea and Coffee Beverage) Kinley Soda Kinley Drinking Water
  42. 42. 42 Manufacturing Plant, Goblej,Kheda Sales and Distribution Operations Distributors Outlets Outlets 2.9: Departmental Overview 2.9.1: MANUFACTURING UNIT OF HCCBPL The industry has established it soft drink manufacturing and bottling plant at Goblej, Dist. Kheda in Gujarat, India. An Effluent Treatment Plant involving Activated Sludge process is designed and commissioned by CA to treat 1200 cu.m/day of effluent with inlet COD 3000 mg/L. The total cost of the project was in Millions and the plant was successfully commissioned in 1998 with treated effluent COD – 100 mg/L. The industry has appointed CA as their consultants to operate and maintain the above mentioned treatment. Fig: Chain followed from manufacture to distributors
  43. 43. 43 Manufacturing Process at HCCBPL: Fig: Manufacturing Process The manufacturing of the products of Coca-Cola involves the following steps:  Water is received from the River Cauvery and it passes through the water treatment plant, further passing through the sand filter and the activated carbon filter, so as to attain pure cleansed water.  In the syrup room, the concentrate received from another bottling plant is blended with the sugar syrup.  Once both the water and the final syrup are ready, they are both mixed together and sent to the carbonator section where Carbon Dioxide is added to the mixture to form the final product.  On the other hand, simultaneously, the returnable glass bottles are de- palletized, inspected and washed for the purpose of filling in the final
  44. 44. 44 product in it. This step does not take place in the PET bottle line as the bottles once used are disposed  The product is finally filled in the bottles, crowned (in case of RGB)/ capped (in case of PET bottles), labeled and cased in order to be sent into the warehouse for distribution Business Plan Model at HCCBPL: Fig: Business Plan Model Coca-Cola India division, Gurgaon Regional Bottlers Customers Manufactures Concentrate, Beverage base and Syrup Manufactures finished Bottles/Cans/Fountain Syrup Consumers
  45. 45. 45 2.9.2: DISTRUBUTION PROCESS OVERVIEW: Distribution of coca cola is done basically in two ways:- a) Direct operation. b) Indirect operation. But the distribution of Coca Cola varies from place to place. In India Coca Cola is doing his distribution by direct operation, indirect operation & by both also. Especially in Rajkot Coca-Cola is doing its distribution by both direct operation & indirect operation. Distribution Network: HCCBPL has a wide and well-managed network of salesmen appointed for taking up the responsibility of distribution of products to diverse parts of the cities. The distribution channels are constructed in such a way that the demand of customers is fulfilled at the right place and the right time when they need it. A typical distribution chain at HCCBPL would be: Production  Plant Warehouse  Depot Warehouse  Distribution Warehouse  Retail Stock  Retail Shelf  Consumer The customers of the Company are divided into different categories and different routes, and every salesman is assigned to one particular route(PJP), which is to be followed by him on a daily basis. A detailed and well-organized distribution system contributes to the efficiency of the salesmen. DISTRIBUTION OF PRODUCT ACCORDING TO LOCALITY Coca-cola Company distributes their schemes according to area. Area or place where soft drinks sold in a large manner, on those place company gives good schemes to shopkeeper and retailer. Place like railway station bus stand are consider in this category and place which have low selling where company gives small schemes to the shopkeeper. Direct Operation: Here company does its distribution by himself. There is no role of middle man. Every activities of a distribution process is under the control of the company. Here coca cola runs its own vehicles in that particular area for the distribution.
  46. 46. 46 By direct operation company gains a lot. The direct operation of the coca cola is as follows:- In 2006 there were only 14 towns under DSD which has been increased to more than 50 towns by 2012. Indirect Operation: Here in the distribution process middleman‟s role came into existence. In coca cola the distributor is the middle man. Everything is not under the control of the company. Basically Coca Cola Company selects a person for some specific areas for the distribution process. Indirect operation of coca cola in Rajkot is as follows:-- COMPANY COMPANY DSD RETAILERS CONSUMERS COMPANY COMPANY DEPOT DISTRIBUTOR RETAILER CONSUMER
  47. 47. 47 2.9.3: MARKETING OVERVIEW Marketing Objectives The ultimate objectives of our business strategy are:  To increase volume.  Expand our share of worldwide nonalcoholic ready to drink beverages sale.  Maximize our long-term cash flows. The Coca Cola system has more than 16 million customers around the world that sells or serves our products directly to consumers. We keenly focus on enhancing value for these customers and helping them grow their beverage businesses. We strive to understand each customer‟s business and needs, whether that customer is a sophisticated retailer in a developed market a kiosk owner in an emerging market. Target Market Coke‟s commercials basically based on young generations, So, the young generation is the target market of Coke because they want to represent Coke with the youth and energy but they also consider about the old people they take then as a co-target market. Major Segments Major segments are basically those people who take this drink daily and those areas where the demand is higher than the other areas. There are so many people who take this drink daily and those people who take weekly and those who take less often are always there as well. So, their basic segments are those people who take this drink regularly.
  48. 48. 48 2.9.4: FOUR P’s OF BUSINESS MARKETING Price, Promotion, Product, and Place a) Product: Businesses must think about products on three different levels, which are the core products, the actual product and the augmented product. The core product is what the consumer is actually buying and the benefits it gives. Coca Cola customers are buying a wide range of soft drinks. The actual product is the parts and features, which deliver the core product. Consumers will buy the coke product because of the high standards and high quality of the Coca Cola products. The augmented product is the extra consumer benefits and services provided to customers. Since soft drinks are a consumable good, the augmented level is very limited. b) Promotion Over the time Coca-Cola has spent millions of dollars developing and promoting their brand name, resulting in worldwide recognition. 'Coca-Cola' is the most recognized trademark, recognized by 94% of the world's population and is the most widely recognized word after "OK". Coca Cola‟s red and white colors and special writing are all examples of world-wide trademarks. There are a number of branding strategies:  Generic brand strategy  Individual brand strategy  Family brand strategy  Manufacturer‟s brand strategy  Private brand strategy  Hybrid brand strategy Coca Cola utilizes the Individual brand strategy as Coca Cola‟s major products are given their own brand names e.g. Fanta, Sprite, Coca Cola etc
  49. 49. 49 although they may be presented as different lines they operate under the name of Coca Cola. c) Place: The Coca Cola Company has always focused wide scale distribution. This is the reason, 94% of the world‟s population knows about Coke. “Coca Cola” is the most recognized word after OK. Coca Cola sets its own distributions directly to stores. Stores include a wide variety of Supermarket, Marts, Convenience Stores, Retail Stores and Departmental Stores. The channel distribution of Coca Cola Intl is extremely large. Over time, they have produced many products and thus have increased number of warehouses for specific products. Coca Cola Intl has also improved services via setting up a national service network. d) Price Since Coca-Cola faces a major threat from its competitor Pepsi Co., so naturally the Pricing is done keeping in view the increasing rivalry with Pepsi. Pricing is basically standard for all over the world.
  50. 50. 50 2.10: SWOT ANALYSIS SWOT analysis is a basic, straightforward model that provides direction and serves as a basis for the development of marketing plans. It accomplishes this by assessing an organizations Strength (what an organization can do) and Weakness (what an organization cannot do) in addition to Opportunities (potential favorable conditions for an organization) and Threats (potential unfavorable condition for an organization). SWOT analysis is an important step in planning and its value is often underestimated despite the simplicity in creation. The role of SWOT analysis is to take the information from the surrounding and separate it from internal issues (strength and weaknesses) and external issues (opportunities and threats). SWOT analysis assists the firm in accomplishing its objectives (strength or opportunity) and overcoming the obstacles (weakness or threats). STRENGTHS: 1. Better network – covers whole of the city. 2. Brand recognition – brand image among customers 3. Brand equity – high equity in the market. 4. Advertisement policy – Coca Cola Company has endorsed with famous celebrities like Aamir Khan, Hrithik Roshan, Akshya Kumar, Priyanka Chopra, Kareena Kapoor and many more. 5. Bottling plants –27 wholly-owned bottling operations Supplemented by 17 franchisee-owned bottling operations and a Network of 29 contract-packers to manufacture a range of products for the company. 6. Promotional schemes – to activate sales company is providing Umbrellas, Chairs, Tables, Racks, Flanges, Visicoolers & Glasses.
  51. 51. 51 WEAKNESSES: 1. Weak and irregular supply. 2. Irregular visit of EXECUTIVES. 3. Low product availability. 4. Scarcity of manpower. OPPORTUNITIES: 1. Greater opportunity in rural areas where Coca-cola can gain a substantial base. 2. 70% of total population lies in rural area, and market penetration of soft Drink is only 12% hence there is greater scope of increasing revenue of the Coca-Cola Company. 3. Opening new outlets in the area where the coca cola‟s market share is less. 4. Company should offer schemes for long term profit to the retailer so that they get involved in long term association. 5. Covering greater institutional areas as younger generation gets much Fascination out of such beverages. THREATS: 1. Impulse customer‟s buy whatever is in the offer, so company should 2. Give offers regularly. 3. Health conscious people are boycotting soft drinks. 4. Threat from Competitors as they give offers at cheaper rates than coca-cola. 5. It‟s too seasonal. 6. People are becoming health conscious.
  52. 52. 52 2.11: ABOUT COMPETITORS The major competition faced by Coca-Cola International is PepsiCo Inc. PepsiCo is a world leader in convenient foods and beverages, with revenues of more than $66 billion and over 297,000 employees. The company consists of the snack businesses of Frito-Lay North America and Frito-Lay International; the beverage businesses of Pepsi-Cola North America, Gatorade/Tropicana North America and PepsiCo Beverages International; and Quaker Foods North America, manufacturer and marketer of ready-to-eat cereals and other food products. PepsiCo brands are available in nearly 200 countries and territories. Major PepsiCo. products include:  Pepsi  Teem  Mirinda  Pepsi Max  Pepsi Lemon  Pepsi Blue  Mountain Dew  7up HCCBPL is also facing considerable amount of competition by local companies and by local fountain beverages especially in Rajkot. Some market segment is much conscious about price as well, so rather being brand loyal, they would prefer local drinks which they can get at cheaper rate.
  53. 53. 53 PART-II : Research Work “Study on Role of Marketing Campaigns in Sales Promotion of Coca-Cola Beverages”
  54. 54. 54 CHAPTER: 3- INTRODUCTION OF THE STUDY: 3.1: BACKGROUND OF THE STUDY Sales and distribution is an integral part of marketing. Here, Coca-Cola the leading brand in soft drinks worldwide. Coca-cola has maintained its brand image with high precision. The marketing strategy of Coca-cola products is very stringent than others. The main features in their marketing are their offerings and its sales and distribution. It‟s my gratitude to work with Hindustan Coca-Cola Beverages Pvt. Ltd. especially in marketing department. I have been placed their in sales and distribution department for my internship. The research work was not as easy as HCCBPL is very strict in their marketing policy. In the beginning the main reason for conducting this study was to know the proper allocation of distribution to the suppliers and also to know about the products sales. Further, it is to understand the availability of the product and to check out that there is the proper advertising of the product and also to know the working condition of the visi-cooler provided by the company. Also to know the various schemes provided by the HCCBL is really applied in the market or not and to compare the schemes with Pepsi products and others. The study is done to understand the problem of the retailers, to understand the presale concept and to increase the current selling of products. 3.2: STATEMENTS OF THE PROBLEMS Main reasons behind doing different kind of campaigns for sales promotion was to solve some problems and to promote the current selling. HCCBPL was facing some of the problems as stated bellow 1. Why some products of Coca-cola are not performing well in Rajkot especially 200ml Coke? 2. Why numbers of retail outlets are decreasing from the existing one? 3. Why overcharging above MRP is being takes place by retailers in market?? 4. Why retailers are not satisfied with the profit margin given to them?
  55. 55. 55 3.3: OBJECTIVES OF STUDY Primary objective:  To find the role of marketing campaigns in sales promotion.  To increase current selling by consumer awareness and creating totally new outlets in the market. Secondary Objectives:  To analyze the distribution channel system.  To check the brand availability.  To analyze the effectiveness of the schemes launched by the company.  To find the retailer‟s satisfaction.  To give valued suggestion to the company. Campaigns undertaken to solve the problems As HCCPBL was facing so many problems stated above, it became vital for them to solve these problems by doing some of the marketing campaigns. By keeping nature of the problems in mind, HCCBPL has designed some marketing campaigns as bellow: 1. Shop in Shop Activity To solve following problems:  Why some products of Coca-cola are not performing well in Rajkot especially 200ml Coke?  Why overcharging above MRP is being takes place by retailers in market?? 2. Horizontal Expansion To solve following problems:  Why numbers of retail outlets are decreasing from the existing one?  Why retailers are not satisfied with the profit margin given to them?
  56. 56. 56 CHAPTER: 4- RESEARCH METHODOLOGY 4.1: INTRODUCTION The topic “Study on Role of Marketing Campaigns in Sales Promotion” for the project work was suggested to me by the MOE (Market Operation Executive) of Hindustan Coca-Cola Beverage private limited, Rajkot. He asked me to conduct a study in areas where the coca-cola market is weak as well as high and to make a study of problems arising in sales promotion. Armed with the ideas provided to me by the MOE and the Area Sales Manager, I went ahead for the research with the help of marketing campaigns designed by them. While working on the campaigns I was responsible myself to collect necessary information from the market which can be helpful in my study. In my research, the retailers in Rajkot comprise the universe. Therefore, they are the ones who constitute as the main source of information to me. I also needed to be in contact with Market Developers for that particular area in order get sufficient information about particular outlets. 4.2: RESEARCH DESIGN The design appropriate for this study is Experimental Research Design. Experimental research studies are also termed as Conclusive research studies. The main purpose of such studies is to observe the current situation and comparing it with situation after doing Experiment. In marketing campaign called “Shop in Shop Activity”, I was analyzing sales figures before the activity is done and after the activity is done at particular outlet. In another campaign called “Horizontal Expansion”, I was measuring the increase in sales after completion of some portion of this campaign and total increase in sales after fully completion of this marketing activity. The study during these campaigns was conducted in RAJKOT by asking retailers and market developers (MDs) of particular areas in which campaigns are going on.
  57. 57. 57 4.3: SCOPE OF THE STUDY 1. By this study company can know its growth. 2. This study helps the company to know their actual position in the market. 3. This study also helps to get a clear idea about where the company is lagging behind & where it is ahead of its competitors. 4.4: DATA COLLECTION The data can be dichotomized into two types: primary data and secondary data. In this study the data collected was mainly primary data. The respondents were from the area of Rajkot only. The secondary data were obtained from the HCCBPL city office. The information collected for the various objectives were from the total number of outlets covered by me under those campaigns. 4.4.1: Method of data collection There are different methods of data collection. They are observation, experimentation, uncontrolled experimentation, controlled experimentation, survey and focus group. Here the data are collected by market survey and experiments. Market survey and Experiments Market survey is one of the most widely used MR (Market Research) techniques. It is at times viewed as synonymous with marketing research. This is erroneous. It has to be understood clearly that market survey is just one of the techniques of MR and is not synonymous with MR. It is just one of the methods of collecting marketing information required for a given marketing assignment. It is used when the required data is not available with the company‟s internal records, as well as external published source. Here the researcher carries out opinion pools involving sales persons, dealers, traders and experts. Trade surveys are very common. In conducting these surveys, the researcher has to carefully select the instrument and methods of surveying.
  58. 58. 58 4.5: INSTRUMENT FOR DATA COLLECTION The primary data collected through the survey method for the purpose of the study. The survey was done by doing Experiments with help of marketing campaigns. Beside this I had an informal discussion with the retail outlets. Secondary data: information regarding the organization was obtained from secondary sources like company journals, company websites, publications & records. How Campaigns helped in collecting Data? Basically these two campaigns called “Shop in Shop Activity” and “Horizontal Expansion” were designed by MOE of HCCBPL to deal with the problem statements mentioned earlier. My study was totally depends on external market so I had to do some experiments through which I can come in to direct touch with market. These two campaigns have shown their potentials to solve all problems that HCCBPL was facing. These campaigns have helped me to explore myself in market and also helped me to collect important information from retail outlets and some other outlets dealing with competitor‟s products as well. I have enough of information with me through these activities and with the help of sales and distribution staff of HCCBPL at Rajkot. Literature Review:  My Research was totally based on Market Experiments to solve problems of HCCBPL. So, As a part of my Research Work , I had to gain knowledge of different marketing experiments done by HCCBPL in Past, especially in Rajkot.  I surveyed literatures provided by my company guide on different Marketing Campaigns conducted in past by HCCBPL in Rajkot. Some problems were there in design and execution of those campaigns so we had to design new campaigns to solve some market problems HCCBPL was facing.
  59. 59. 59 CHAPTER: 5- ABOUT MARKETING CAMPAIGNS What is Marketing Campaign? Marketing Campaigns are specific activities designed to promote a product, service or business. A marketing campaign is a coordinated series of steps that can include promotion of a product through different mediums (television, radio, print, online) using a variety of different types of advertisements. The campaign doesn't have to rely solely on advertising, and can also include demonstrations, word of mouth and other interactive techniques. Gist of Marketing Campaign A marketing campaign isn't something that comes to you while you're taking a shower. Successful campaigns tend to be carefully researched, well thought- out and focused on details and execution, rather than resting on a single, grand idea. Planning a marketing campaign starts with understanding your position in the marketplace and ends with details such as the wording of an advertisement. Keep in mind that your plan for a marketing campaign is not supposed to be a prison. You have to leave room to make changes as you go along because no plan can perfectly capture reality. But you should also be able to commit fully to implementing your plan or some future version of it if you want to take a strong step toward growth. Need of Marketing Campaign Nowadays it became very difficult to sustain market share and market growth of the company even for market leaders so without doing any promotional activities one may not survive in this competitive market. Marketing campaigns helps in promoting your products and making customers aware about your products. It also helps you to create brand image of your products and so as of your company also. Hence marketing campaigns has a vital role in sales promotion of products in competition.
  60. 60. 60 Different ways to launch Marketing Campaign Here are some ways to launch your campaign:  Speak at community events: Offering your expertise at public occasions is an easy way to get the word out about your business. You'll maximize your impact and lend credibility to your product or service.  Ask customers for referrals: Generating referrals from current customers is one of the best ways to market your business. Don't forget to query your vendors (they're likely to have many contacts) and explain to your customers exactly what kinds of referrals you're looking for and how they can help.  Spend two days in your customers' shoes: To find out what your customers really want, visit a wide range of businesses they're likely to frequent. Observe how customers are treated, as well as the kinds of services that appear important to them; then adapt your business accordingly.  Offer free samples: If you can get someone to try your product or service, chances are they'll buy it later. Have employees pass out product samples in front of your business; if you provide a service, offer free services on a trial basis. Campaigns undergone for study purpose Followings are the campaigns that I underwent during my SIP project and through which I have collected some important information for my study. 1. Shop-In-Shop Activity 2. Horizontal Expansion
  61. 61. 61 5.1: Campaign 1: “Shop in Shop Activity” 5.1.1: What is Shop-In-Shop? This campaign is been named as a “Shop-In-Shop Activity” because in this campaign we were doing retail selling of 200ml coke at its MRP (i.e. Rs. 8) in premises of selected outlets with prior permission of their owners. We were having our separate stall with enough communication banners to deal with consumers and were simultaneously doing same activity at different outlets in different areas in a group of two. 5.1.2: Aim of Shop-In-Shop Activity Main aim of this activity was to spread price awareness among our customers and telling them, not to pay over its MRP (i.e. Rs. 8). During this activity we came in a contact with thousand of consumers and tried to convince them to fulfill main aims of this activity.
  62. 62. 62 5.1.3: Need of Shop-In-Shop Activity: This activity was needed not only for promoting 200 ml Coke but also was needed to make consumers aware about actual MRP of 200 ml Coke. Some retailers were charging more price than the MRP of 200 ml coke (i.e. Rs. 8) which makes customers to switch on some other company‟s products or to local fountain beverages. It was very necessary to spread awareness among customers and that was only possible through this type of activity Why to promote 200ml Coke only through this campaign? It was a subjective decision of HCCBPL to promote only 200ml Coke through this activity because Coke is an oldest formula of Coca-cola and it is having high market in other countries with compared to India. Other products of Coca-cola are performing well in Rajkot although they all are having more MRPs than Coke so it was in need to promote 200ml Coke to increase sales of Coke and to compete with Pepsi. 5.1.4: How we executed Shop-In-Shop Activity? This was the challenge for HCCBPL to successfully complete this activity. We all interns were ready to work on this campaign so we all assigned under the guidance of MOE and we were responsible for daily reporting for our work to our company guide. We all were given basic ideas about this activity and we had to work accordingly. Generally we were working in a group of two throughout this activity and all groups had been assigned to different outlets in different areas of Rajkot to perform the same activity. It was a role of Market Developers (MDs) who were working under STLs to convince outlet owners for performing this activity in their premises for given days. It was very difficult for MDs to convince outlet owners who were overcharging for Coca-cola products as we were going to sale at its MRP but still somehow they managed it and convinced them for this campaign. It was
  63. 63. 63 pre-decided for us to sale 200ml Coke from the stock of outlet only and profit would be of outlet owners. How we were working during this Campaign? We were about 5-6 groups with all equipments (i.e. Umbrella, Table-Chair, Ice-Box, Counter-top, Different Communication Banners, etc.) given to us. We all were working simultaneously at different outlets in different areas. This activity should be performed minimum for two day at single outlet. It can be done for more than two days depending upon footfall of that outlet. We need to set our stall in such a way that people who passing from, could see it easily. We had to manage for ice daily to keep bottles cool in Ice-box. Payments for ice would be given by company so outlet owners didn‟t need to spend for ice. We need to convince people who come to that outlet to have coke or the people who passing nearby. We were also responsible for giving answers for the doubts of consumers and to aware them about price and product. We were keeping record of sales and people visiting per hour. At the end of the day we were summing up all figures to analyze per day selling. We always need to be at our stall for customers during the time of activity and it was a time of summer so peak time of a day would be more crucial to sale as many Coke as possible. People would attract by communication banners and table-top which were having tag of “200 ml Coke only at Rs. 8”. We were having our pen and papers with us to keep daily Sales Record and to note some questions asked by peoples and suggestions given by them. Through this campaign, HCCBPL became successful to expand the market for “Coke “, and also helped their customers to be aware about price. It was a major question for HCCBPL that after doing this campaign, whether outlets will be agreed for not to overcharge and to sale product at its MRP only.
  64. 64. 64 5.1.5: Major Challenges faced to successfully complete this Campaign 1. As our main goal was to convince our retailers to sale our products at its MRP only not more than that so it was very difficult to convince all the retailers because they were not satisfied with the profit margin given to them by HCCBPL and that‟s why they were charging more to earn more. So this was a challenge for us to make our retailers agree with company policies but at the end we convinced them with our marketing skills and by simply telling them “Higher the Price lower the Demand and Lower the Price higher the Demand” and we also proved this. 2. It was again a challenge for us to give answers of some difficult questions asked by retail customers but we have managed it with our deep knowledge about company‟s policies and their practices. 3. We were responsible to convince some people who have not tried Coke to taste it once and also telling them how our product is good then Pepsi product. How Shop-In-Shop Activity helped me to do my study? Before starting this campaign, we have surveyed market with the help of MDs assigned under different distributor‟s area. We analyzed whole market and current selling of particular product in particular area. So this information has become prior observation before doing this campaign. Now all we needed to do was to perform this campaign and to make it successful. We were keen to know that what will the effects of this campaign in the market later, whether it will help HCCBPL to expand its market or not?. And finally we were very happy to conclude this campaign because it has helped HCCBPL a lot to fulfill all their objectives behind this activity. Market was far better than preview situation now after undergoing Shop-In- Shop Activity in selected areas of Rajkot.
  65. 65. 65 5.1.6: Data Analysis and Interpretation of Shop-In-Shop Activity: Table: Worksheet of Shop-In-Shop Activity Sr. No. Date (2013) Outlet Name Address (Rajkot) Average Footfall per Day Average Sale per Day (No. of Bottles) Increase in Sales (in %) Before S-I-S Activity During S-I-S Activity After S-I-S Activity 1 3 rd to 5 th April Vishal Pan Limda Chowk 146 6-7 bottles 33 bottles 11-12 bottles 83-84% 2 6 th to 9 th April Momai Cold- Drinks Bhaktinagar Circle 212 16-17 bottles 79 bottles 26-27 bottles 62-63 % 3 10 th and 11 th April Balaji Belt Boghani Street, Soni Bazar 169 12-13 bottles 62 bottles 17-18 bottles 41-42 % 4 12 th and 13 th April Babul Pan and Coldrinks Near Keshari Bridge, Naklank Chowk 126 5-6 bottles 42 bottles 9-10 bottles 80-81 % 5 15 th to 17 th April Bajarang Pan and Tea Yagnik Road 204 15-16 bottles 57 bottles 19-20 bottles 26-27 % 6 18 th and 19 th April Sakti Pan Popat Para main road 93 4-5 bottles 39 bottles 8-9 bottles 100% 7 20 th and 22 nd April Patel Pan Sadhu Vaswani Road 120 6-7 bottles 38 bottles 10-11 bottles 66-67 % 8 23 rd to 25 th April Raj- mandir Cold- Drinks Sadhu Vaswani Road 132 8-9 bottles 44 bottles 14-15 bottles 75-76 % 9 26 th and 27 th April Priya Pan Kishan Para Chowk 247 12-13 bottles 42 bottles 15-16 25-26 % 10 29 th April to 1 st May Viddhi Ice-Cream Kalavad Road, Opp. Atmiya College 193 13-14 bottles 53 bottles 18-19 bottles 38-39 % 11 2 nd to 4 th May A-1 Coldrinks& Ice creams Kotecha Chowk 172 17-18 bottles 77 bottles 25-26 bottles 47-48% Total/ Avg 4899 10-11 Btl/day 1554 (65 cs) 16-17 Btl/day 58 – 60 %
  66. 66. 66 Above table shows the analysis and interpretation of the data collected by me during this activity. It shows average selling per day before, during and after Shop-In-Shop Activity. This table helps us to know effectiveness of this campaign outlet wise and it also shows increase in the average selling of 200ml Coke at particular outlet. Mainly I covered 11 outlets during this campaign to do retail selling of 200ml Coke and I kept record of average footfall per day and average selling (In bottles) per day as shown in table. Last column shows percentage increase in sales at that particular outlet. How I found average selling per day, before and after? Before starting “Shop-In-Shop Activity” at any outlet, I was getting information about per day selling from outlet owners and with the help of Market Developers (MDs) of that area. Through this I got idea about per day selling of that outlet before this campaign. I was also keeping record of per day selling during this activity so that I can measure the effectiveness of Shop-In-Shop. Main challenge was to measure increase in sales at particular outlet after completion of this campaign at that outlet. For this, I was visiting those outlets daily for next 10 days at which we performed this activity and was asking them about increase in sales of 200ml Coke due to this campaign. So, this how, I collected data about increase in sales at particular outlet. Table Shows  Shop-In-Shop Activity has positive result as it has helped HCCBPL to fulfill desired aims and helped to solve problems.  Total Avg. Increase in sales of these 11 outlets was about 58% to 60% and I sold total 1554 bottles (i.e. ~65 CS) of 200ml Coke at the end of this activity.  Total number of retail customers I came in touch with during this entire activity were near about 4899 (Customers might got repeated), so most
  67. 67. 67 of them got awareness about product price and service we provided to them.  Average selling of all these 11 outlets was 10-11 bottles per day before S-I-S activity. It was 51-52 bottles per day during S-I-S activity and increased to 16-17 bottles per day after S-I-S activity. 5.1.7: RESULT AND FINDINGS Chart 1: Chart: 1- Avg. bottle sold per day before and after S-I-S Activity at each outlet Above bar chart demonstrates the data available in previous table. Chart includes all outlets that I covered during shop-in-shop activity. 0 5 10 15 20 25 30 OL-1 OL-2 OL-3 OL-4 OL-5 OL-6 OL-7 OL-8 OL-9 OL-10 OL-11 6.5 16.5 12.5 5.5 15.5 4.5 6.5 8.5 12.5 13.5 17.511.5 26.5 17.5 9.5 19.5 8.5 10.5 14.5 15.5 18.5 25.5 Increase in Sales(Outlet wise) Before S-I-S Activity After S-I-S Activity
  68. 68. 68 In char-1, Bars in front show average bottle sold per day before S-I-S activity at particular outlet and bars at backside show average bottle sold per day after S-I-S activity at particular outlet. Chart 2: Chart: 2-Total avg. selling per day before, during and after S-I-S Activity Chart-2 shows total average selling of 200ml Coke of all 11 outlets per day before, during and after Shop-In-Shop Activity. Before S-I-S, Avg. selling was 10.5 bottles per day of all outlets and during this activity, average selling was much higher, i.e. 51.5 bottles a day and due to this activity total average selling increased to 16.5 bottles a day. 5.1.8: CONCLUSION OF SHOP-IN-SHOP ACTIVITY: All above charts and table shows that “Shop-In-Shop Activity” has helped HCCBPL to increase average selling of 200ml Coke in given areas of Rajkot. It has got the growth of 58% to 60% in selling of Coke at those 11 outlets. This activity has proved its role in sales promotion of Coca-cola product and spread awareness among thousands of people about Price and Product. It was executed effectively to achieve desired results and HCCBPL has got that. 10.5 51.5 16.5 0 10 20 30 40 50 60 Before S-I-S During S-I-S After S-I-S Total Avg. Selling Per day
  69. 69. 69 5.2: Campaign 2: “Horizontal Expansion” 5.2.1: What is “Horizontal Expansion” in General meaning? It is an expansion of business capacity through the absorption of facilities or buildings as well as through the acquisition of new equipment to handle an increased volume in sales in which the business is already engaged. In microeconomics and strategic management, the term Horizontal Expansion describes a type of ownership and control. It is a strategy used by a business or corporation that seeks to sell a type of product in numerous markets. Horizontal Expansion in marketing is much more common than Vertical Expansion is in production. Horizontal Expansion occurs when a firm is being taken over by, or merged with, another firm which is in the same industry and in the same stage of production as the merged firm, e.g. Pepsi has adopted strategy of Vertical Expansion by which Pepsi wants to improve its sale from Coke monopoly outlets, means Coke‟s monopoly outlets are being taken over by Pepsi now in this condition to improve its sale Coca-cola needs to open new outlets which is called Horizontal Expansion Strategy. A monopoly created through Horizontal Expansion is called a Horizontal Monopoly. 5.2.2: Need of Horizontal Expansion The ultimate objective of Coca-cola is to acquire more customers and serve them properly. While doing Horizontal Expansion take care to the competitor‟s strategy. The main competitor is PEPSI, who has opted Vertical Expansion to generate more sell however Coca-cola does not believe on Vertical Expansion because Vertical Expansion has limited preview so Coca-cola is great believer in Horizontal Expansion and this strategy helped to the company to maintain its leadership in the soft drink industry. India is a big country having diversified taste and appearance and same character is reflected in their demography. Horizontal Expansion helps the company to serve more people and more customers touch points. Main reason behind doing Horizontal Expansion was to sustain against the competitors‟ strategies. It was very necessary for HCCBPL to keep their growth high and for that this kind of market expansion campaign was needed.
  70. 70. 70 5.2.3: How we performed “Horizontal Expansion”? This campaign was all about “Creating new outlets” for selling of Coca-cola products. Horizontal Expansion is one of the most effective market expansion strategy used by well reputed companies in the world. Making expansion in same business or for same product can be referred as a Horizontal Expansion. We were working in a group of 2 people and we had such 4 groups in our team to perform this campaign of Horizontal Expansion. We all had been provided enough materials (such as Product Samples, Price List of Products, NC kits, NC forms, etc.) and information needed to do this activity. We were working in clusters to perform “HE” in some main areas of Rajkot, such as 1. Mavdi 4. Sadhuvasvani Road 2. Atika 5. University Road 3. Bajarang vadi 6. Kalavad Road We used to have get meetings with MOE (Our company guide) and STL to design our day to day activity. Our guide decides which group will cover which area and we had to work accordingly. Different group would be covering different areas. We were responsible for reporting our day to day work to him. To convince new outlets we had to tell them all benefits will be given to them by coca-cola if they agree to sell our products. We were also responsible for doing commitment to provide visi-cooler if required and to collect necessary documents from them for further processing. Targeted Outlets Basically we were targeting outlets like: E&Ds (Eating & Drinking), Grocery Shops, Dairy farms and Medicals (for Kinley Water).
  71. 71. 71 Reason behind targeting all above outlets was mainly to attract ladies customers to purchase Coca-cola products especially available in PET. Usually they don‟t visit PAN shops to purchase PET bottles. We were also targeting outlets having Pepsi products to convert them in to Coca-cola outlets. We were targeting Medical stores for Kinley water available in 500ml as well as in 1ltr. Above, in the picture is one of the outlets we convinced for Horizontal Expansion. You can see the display of Coca-cola products as per the company norms. We were responsible to inform distributors to dispatch products at newly convinced outlets as per the order generated by them. And we would be making display of products in convenience to outlet space.
  72. 72. 72 5.2.4: How we convinced for new outlets? To do Horizontal Expansion more efficiently we made a profit story and talked to the shopkeepers according to that story. Story: Salesperson – Hello sir, I am from Coca-cola and I have a proposal that will surely increase your income. May I present you? Shopkeeper – Yes, you can present it. Salesperson – Thank you Sir, if you will start to sell our products then your overall sale will be increased and it is not tough to sell our products because Coca-cola is the leader in beverage industry and a very well known brand. Shopkeeper- Okay I know that, but how it will increase my overall sale? Salesperson - Sir, you are selling Chips, Pastries, Snacks and kind of things. So these products have a very good combination with cold drinks. If a person wants to purchase any of these products then it is quite possible that he/she will purchase Coca-cola products and vice versa. Shopkeeper- May be but I have to put your products in the cooler to chill and without cooler, I think it‟s impossible for me to sale your products. Salesperson- Sir you are right but see, in starting, I want you to keep PET bottles only. People can‟t consume whole bottle at a time and they would purchase to bring it home and will keep there in fridge. And we will also provide you cooler once you start selling our products but it has legal processor through which we need to pass which will take around 25 days to dispatch your cooler. So you can start with small order also. Shopkeeper- Okay but what is overall profit margin and do you provide any extra schemes? Salesperson- Yes sir, we currently have market schemes on purchase of whole case. We are giving 2 free bottles of 1 ltr kinley water on case of any of our products (600ml, 1.25ltr, 2,25ltr). We provide 1 free bottle of 400ml on
  73. 73. 73 purchase of 400ml case. On purchase of kinley soda, we provide 2 bottles free of the same. For mazza tetra packs, we are giving 3 pieces free on purchase of 1 case. Including this schemes, your total profit margin will be around 12-13 %, which is not bad. Shopkeeper – Okay and how much profit can I earn through your products? Salesperson – Sir if you are really interested to explore through our products, you may be able to sell 1 case of 400ml, 1 case of 600ml, 1 case of 1.25ltr and 1 case of 2.25ltr in mix. And to start selling our products you need to invest near about 2281 Rs. We will also provide you free NC kit as compulsory given by Coca-cola and Communication banners or rack to hold our products if you want. Consider following table (for non-coke products only with scheme): Weight of products Rate per case(Rs.) Qty MRP (Rs.) Revenue (Rs.) Profit (Rs.) 400ml 522 24+1 free 23 575 53 600ml 677 24+ 2 K.W. 30 760 83 1.25ltr 496 12+ 2 K.W. 45 580 84 2.25ltr 586 9 + 2 K.W. 70 670 84 Total 2281 304 Sir if you order same, 8 times in a month (Even in Peak season) Profit per month will be (in Peak season) = Rs. 2432 Profit of whole peak season = Rs. 9728 (Consider peak season of our products is only of 4 months) Profit of rest of the 8 months (Per month: Rs.1824) = Rs. 14592 (Because as per assumption that in OFF season our income becomes 2/3 with compare to the peak season)
  74. 74. 74 Profit of whole year = Rs. 24,320 Your investment = Rs. 2281 Your ROI = 24,320 * 100/2281 = 1066.199% Shopkeeper - But I do not think this much will work what about electricity bill that I need to bear to keep your products cool? Salesperson- Nice question sir but let me tell you. If you are keeping our cooler ON for whole day, it will consume power as low as 2 units per day. Which, we can‟t compare with your rate of return. So, what you have to say about our offer? Shopkeeper - Yes, I think it will be a profitable deal to accept your offer. Salesperson - Thank you sir and Congratulation (Shaking Hands). Your order will be dispatched within 2 days as our salesman will have this route. On some big outlets we had to offer coolers and for that we were in need to collect 1 photo copy of Driving license, 1 photo copy of electricity bill and 1 passport size photo of shopkeeper.
  75. 75. 75 5.2.5: RESULT AND FINDINGS (Outcome of Horizontal Expansion) Apart from the other benefits of horizontal expansion, its main benefit is to generate incremental revenue for the company. During the project I studied strategies and analyzed the market. My major job was to use different tools provided by the company for horizontal expansion like visi-coolers, ice box etc. to open outlets for coca-cola products. With my other team mates I targeted the market of Rajkot and our outcome was as follows: No. of New outlets in 150ft Road=12 No. of New outlets in Mavdi Chowk area=11 No. of New outlets in Sadhuvasvani Road = 8 No. of New outlets in Bajarang wadi area= 6 No. of New outlets in Atika area= 5 No. of New outlets in other areas= 13 Total new outlets created during “HE”= 55 (Note: see annexure for the list of outlets) Revenue generated through Horizontal Expansion for the company Average order at each outlet = 3 cases per outlet Total Sales = 55*3 = 165 cases Avg. price per case =Rs. 570 (approx.) Total Revenue generated in single order = 570*165 = Rs. 94,050 If we assume that each new outlet will place same order 4 times in a month then Total Revenue per year = 94050*4*12 =Rs. 45,14,400. Hence we can see the huge revenue generated by the horizontal Expansion. It also increased the visibility and market share of the coca cola products.
  76. 76. 76 Revenue generated by “HE” for different distributors: There are different distributors of coca-cola in Rajkot to cover different areas. We helped those distributors to increase their revenue by creating new outlets in their areas. All 55 new outlets created by us are served by specific distributor under which particular outlets fall. Following chart shows revenue generated for different distributors by “Horizontal Expansion”. Chart 3: Chart: 3- Revenue generated from the 1st order for particular distributor Above chart illustrates revenue generated from the first order of all 55 new outlets for individual distributor. From this chart we can conclude that Balaji Enterprise has generated large amount of revenue through this campaign undertaken by us. More numbers (14 outlets) of new outlets fall under area of this distributor so it has generated high revenue. Parth Enterprise has generated revenue from 11 new outlets simultaneously Madhav and Siddhbali Enterprises have generated revenue from 13 and 7 new outlets respectively. 10 outlets were covered by other distributors of Rajkot. Parth Enterprise Balaji Enterprise Madhav Enterprise Siddhbali Enterprise Other Distributor s Revenue Generated 18,810 23,940 22,230 11,970 17,100 0 5 10 15 20 25 30 Rupee Thousands Revenue Generated
  77. 77. 77 5.2.6: Benefits of horizontal expansion  Provides Incremental Volume & Revenue for the Business.  By horizontal expansion there will be more outlets of our products in the market which will sell our products in more quantity. This will generate incremental revenue for the business.  Helps to improve route productivity:  There are pre determined routes through which product is transported and delivered at the coca-cola outlets. If we open more outlets on the routes it will increase the productivity because more outlets will be covered and more products will be delivered with a negligible increase in time and efforts. Hence it will improve productivity of the route.  Opening new outlets will also give more revenue to our distributors hence it improves profitability of our distributors.  Reduced dependence on large customers. We know that coca-cola products have a very good demand and to comply with this we have to provide large amount of supply. In case we have few outlets a large amount of stock is gathered at few retailers. In this case they become monopolistic and so they can demand more things like coolers, discounts, margins etc. from the company. So it is very necessary to reduce dependence on large retailers by opening new outlets. 5.2.7: Role of “Horizontal Expansion” in Sales Promotion This campaign named “Horizontal Expansion” has proved its role in sales promotion of coca-cola products as it has helped in generating large amount of incremental revenue for Coca-cola. It has also helped to convert Pepsi outlets in to Coca-cola outlets. These newly generated “55” outlets will help HCCBPL to come in touch with more number of retail customers which ultimately leads to expand current market of Coca-cola. Hence we can say that this campaign has served its purpose for which had been designed.