1. A Project Report
On
“A Brief study on Effectiveness of Channel of Distribution
of Pepsi Products”
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2. CONTENTS
Title
Chapter 1. Introduction to the Study
Objective of the Study
Importance and relevance of the Study
Scope of the Study
Methodology used in the study
Limitation of the study
Chapter 2. Introduction of the Soft Drinks in India
History of Soft Drinks in India
History of Pepsi
Production Process
Product Manufactured and Main Consumer
Chapter 3. Organizational Structure
History and Organizational Structure of Lumbini Beverages
Pvt. Ltd. Hajipur
Chapter 4. A Theoretical frame work of Channel of distribution
Chapter 5. Channel of distribution of Lumbini Beverages Pvt. Ltd.
Chapter 6. Performance of Patna
Chapter 7. Conclusion and Suggestions
Questionnaire
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3. CHAPTER 1.
INTRODUCTION TO THE STUDY
Objective Of The Study
Importance And Relevance Of The Study
Scope Of The Study
Methodology Used In The Study
Limitation Of The Study
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4. INTRODUCTION TO THE STUDY
When Mr. Rajeev Gandhi came into the power as Prime Minister of India, then it
was expected the liberalization of Indian economy. This was the expectation of his
modern concept regarding every walk of life. When Pepsi has appealed on our collective
consciousness of few years ago to be more exact in April 1989. When it set up operation
for beverages snack foods and export business. The establishment of Multinational
Company Pepsi was supposing to prediction in present Indian business scenario.
Despite love for ones own motherhood and traditional concept of Indian people it
was assumed that it is very hard to make and create taste and preference about soft drinks
but despite of having so many confusion, no one was able to assume such a wide
acceptance and it was PepsiCo. Who could be able to penetrate in Indian soil and it was
the Pepsi that has got not only a place in Indian hospitality, but also taken place of
traditional sharbat of lemon and sugar. And needless to say “Generation next has become
the slogan of the day.”
The first managing director was Mr. Ramesh Vanagal but present is Mr. P.M.
Sinha in India. During these years beverages begin an exclusively franchise operating
beverages now has five company owned bottling operation (COBO) the business expects
to grow three times faster than the industry growth rate 1995 and its vision is to become
INDIA’S BEST CONSUMER PRODUCT COMPANY in all aspect. The snacks
business has seen some major success and going for leadership too. Pepsi is a leader in
the snacks food business. The division plans to introduction wide range of snakes in to
Indian market in the next three years. The restaurant business has also come Kentucky
Fried Chicken (KFC) has opened its first outlet at Bangalore Pizza but it also expected to
open restaurants shortly city wise. Whole of the operations of Pepsi in India has made a
rapid change in Indian life style, which is resulting in fast food life.
Pepsi is a world leader in restaurant & soft drink whether it is in London or in
Ludhiyana, America or Ahamedabad, Berlin or Bombay, Paris or Patna, Manchester or
Madras.
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5. Pepsi company has pumped in Rs. 300 crores ($ 95 million) as fresh capital and
has recently received permission from the foreign investment board in Rs. 300 crores
($95 million) more. The investment phase will continue and could add unto Rs. 700
crores over the next three years. The figure is not cast in stone if volume exceeds
according to expectation. They will increase capital expenditure.
Apart from these things there is an expression which can not verify easily that is
Pepsi has made qualitative gains. The foremost is its image from being perennially seen
as a loosing company it’s now got the image of being a winner. This major turn around is
not small achievement considering that since it was established in 1989 taking the hard
ship route prior to liberalization and weighed down by export commitments. Pepsi has
won more battles than it has lost.
In April 1993 Voltas and Punjab Argo’s stakes were bought over
converting Pepsi foods from a three way joint venture to be a fully owned subsidiary
week bottlers who did not have the financial capacities were given massive support in the
form in interest free loans to upgrade their operating capacity . But the strategy which has
proved to be winner was the position, Pepsi decided to take in Company Owned Bottling
Operation (COBO). For this another subsidiary PepsiCo. India holding was set up as an
investment vehicle, capitalized 95 million dollar. Within a year 1994 Pepsi has bought
over 5 bottlers including dukes in Mumbai, which was running in Maharastra which has
been bought over from Voltas high speed imported lines with a speed of 600 bottles per
minute was installed in Delhi. Pepsi has a strong franchisee in the Jaipuria’s of Pearl
drinks. Pepsi is setting up a new plant at Jaipur.
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6. OBJECTIVE OF THE STUDY
Management is a course which teaches the student to get the work done properly
from different available sources viz. man, machine, material, money etc. So there can be
a satisfaction from the organization side and the workers side who play a significant role
in achieving success. So far the fulfillment or the management course, it gives emphasis
to project work and students learn how to plan in practical terms rather in terms of theory
only. Student tends to develop analytical and problem solving skill. We necessary
become motivated and competitive, in fact all the learning that goes on for the two year
term become so much the part of our thinking that we developed a well all rounded
personality.
The following are the objectives and purpose of the study-
i) For the fulfillment of Master of business administration
(MBA)programme as realized by the Shekhawati institute of
management sikar. (AICTE approved)
ii) To care and contact with the working of an organization and to see the
different types of marketing activities. The main emphasis is on the
distribution Channel aspect of the organization.
iii) Whatever the subject taught in the class room of MBA course that is
completely theoretical. So during the training period we compare how the
marketing research (sales) activities (practical) of our organization with
the theories.
iv) Find the depth and width of distribution channel adopted by Lumbini
Beverages Pvt. Ltd. Hajipur and compare them with those followed by
competitors.
v) To ascertain the consumer brand perception of cold drinks with respect to
price, product, quantity and advertising.
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7. IMPORTANCE AND RELEVANCE OF THE
STUDY
Cold drinks were started with the idea of quenching the thirst of the persons
traveling. It was also felt that reliable good water was not available everywhere. So
people would really on their packed bottle and with this idea its makers made these
drinks available mostly, at those places where water was not available i.e. on highways
and long distance trains.
But slowly and slowly with its beautiful taste these become very popular and now
they are available not only in the market and street corners, but also people have started
keeping it in their house.
The credit of popularizing the soft drink goes to Coca Cola. This was the drink
which is liked by all ladies, gents and children. Now day’s soft drinks are quenching
thirst looks more often; they are taken due to habits.
Gold Sport is considered as the first branded soft drinks, established 53 years ago
before all empowering Coca Cola faced competitions and its euphoric image built up in
the western countries helped it get ready clientele and clamor. Parle Export Pvt. Ltd. is
regarded as the first Indian Company introducing Limca a leman drink complementary to
it this has also introduced Cola Pepone which was withdrawn in the face of tough
competition from Coca Cola.
When Coca Cola bid a Farwell in 1977, Indian market was open for various new
forward publishing different brands in the markets. Parle people introduced their Cola,
Thums Up with a mighty saying “Happy days are here again” as if happy days went away
with Coca Cola. Pure drinks of Delhi also without lasing much introduced pure drinks
were producing and marketing Coca Cola earlier Campa Cola with Campa orange and
Campa lemon. Modern Bakeries entered the market with Double Cola Seven, Mohan
Makings with Merry & Plkup and McDowell with Thrill, Rush and Sprint. This is Indian
market where there was no competition and high voltage advertising was on each one
was trying their best to become number one company with ‘A’ class product in the field
of Soft Drink business. Now after a long gap government of India had given permission
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8. to Coca Cola, which joined with Parle to do business in India. They are trying their best
to regain prestige which it had before. The much rival of Parle is Pepsi an American
concern. It started business on the Indian soil just a few years ago.
Today, it has occupied 62% shares of Soft Drinks market in India. Now Pepsi is
going all out to prove that they are the best. But now due to some factors competition
among them has become stiffen. So in this way the important activities have increased.
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9. SCOPE OF THE STUDY
The main scope of this study is to ascertain the effectiveness of channel of
distribution and various methods to increase the sales volume of the concern. The
methods include regular information to the buyers creating a brand position in the market
and taking measures to make the brand remain in its position. One of the important
aspects of this study is also to increase the market segment for the product.
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10. METHODOLOGY USED IN THE STUDY
“Marketing Research is the systematic designing, collection, analysis, and reporting of
data and finding relevant to a specific marketing situation facing the company.”
The present study of Soft drinks markets in all over Patna is based on survey
methods. In survey methods, there are two types of survey. One is Census Method and
another is Sampling Method. In this sample survey methods I have taken only a small
part of the whole and data collected from the small part are made applicable to the whole
i.e. I have taken Patna and some adjacent area of Patna like Danapur, Patna City etc.
Within the time limit, I tried my best to select the sample representative of the
whole group. During my training, I maintained different chart for different routes during
my dealer survey. I have collected data from the distributor of Patna.
Data Sources
Primary data collection involved distributors, retailers and consumers
Research Approaches : Survey
Research Instrument : Interview Schedule
Sampling Plan
Sampling Unit : Distributors Retailers Consumers
Sampling size : 02 350 1100
Sampling procedure : Purposive Selection
Contact Method : Personal Interview
In interview schedule I used multiple choice question and ranking system
questions.
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11. LIMITATION OF THE STUDY
As I was asked to carry on my vocational training I found the following limitations
during my training period. So I could not collect all information regarding my topic.
i) Shortage of time factor was one of the biggest constraints.
ii) Most stress was given on the primary data as it was difficult to collect
secondary data from the organization and distribution since it is difficult to
ascertain the authenticity of their statements.
iii) All the observation and recommendation will be made on the feed back
obtained from survey.
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12. CHAPTER-2
INTRODUCTION TO THE SOFT DRINK IN INDIA
History Of The Soft Drink In India
History Of Pepsi
Production Process
Product Manufacturing And Main Consumers
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13. HISTORY OF THE SOFT DRINK IN INDIA
Christopher Columbus as a traveler of world found a lot of new things which was
not in the eye of the world community which is now in our history but now if any one
does travel to whole part of world to get one thing in some form that is Pepsi. Travel to
any corner of the globe you are sure to spot a label splashed in blazing blue, red and
white becoming you to some “Sugared water”. This dark coloured drink WillyMilly has
today become nothing but spot of an international anthem with young and old, rich and
poor wants for a sip and saying “Yeh Dil Mange More.”
Gold Spot is considered as the first branded soft drink established 53 years ago
before all empowering Coca Cola entered the country to dominate the scene. It faced no
competition and its euphoric imaged built up in the western countries helped it to get
ready clientele and glamour. Parle Export Pvt. Ltd. is regarded as the first Indian
company introducing Limca, a lemon drink complimentary to there well established Gold
Spot in 1970 which got moderate success. However, before this, he had also introduced
Cola Pepino which was withdrawn in face of tough competition from Coca Cola.
When Coca Cola bid farewell in 1977, Indian market was open for various cold
drinks several companies came forward publishing the different brands in the market.
Parle people introduced their Cola Thumps Up with a mighty bang saying “Happy days
are here again” as if happy days went away with Coca Cola.. Pure drinks of Delhi also
without losing much time introduced pure drinks were producing and marketing Coca
Cola earlier Campa Cola along with Campa orange and Campa lemon. Modern Bakeries
entered in the market with the Double Seven.
Moharn meakings with Merry Pikup and McDowell with Thrill, Rush and Sprint in
Indian market where there was no competition previously. A cut throat competition and
heavy advertising was on. Each one was trying their best to become the number one
company with ‘A’ class product in the field of soft drink business in India.
Now after a long gape the govt. of India has given permission to the Coca Cola to
start their business in India. Coca Cola has joined hands with Parle to the business on the
Indian soil. They are trying best to regain its prestige which it has before.
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14. The much rival of Parle is Pepsi an American concern. It started business the
occupied nearly 50% share of soft drinks market in India. Now, Pepsi is going all out to
prove that they are the best.
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15. HISTORY OF PEPSI
PepsiCo is a USA based company having its head quarters at New York with the
net worth of $30-40 million. The average sales of the company are approx 90 million
bottles per month. Pepsi made it first international move in Russia in 1959. During the
Khrushchev era, within 32 years Pepsi emerged as the biggest competitor for Coca Cola.
Pepsi is available in 155 countries.
In any soft drink, on the globe Pepsi food is one of the largest soft drink
companies in the world with its headquarters in New York. It was invented by Pharmacist
Culab D. Baradham in 1898 to cure the disease “Dyspepsia”. It is from this word that its
name was related to Pepsi. Soon it entered the American market as soft drink, which at
that time mostly dominated by Coca Cola, but soon Pepsi able to dominate the Cola
market, and there after it never looked back. Pepsi and Coca Cola are engaged in
ferocious cola war that has taken the whole world by storm.
Pepsi entered the Indian soft drink in Kanpur in 1988 and began its production in
May 1990 and soon it was giving the local contenders run for their money in soft drink
market. It comes out with dazzling marketing innovation that rocked the cola market, like
selling the product through function Pepsi outlets. Its advertisement agency was
“Hindustan Thomson Association” (HTA). Its advertisement budget for 1995-1996 was
valued at Rs. 24 crores which is likely to be increased manifold in coming years.
Pepsi food is one of the largest and best foreign investments in India. Till today it
has invested Rs. 500 crores in India to develop the local market. Pepsi has distributed
exclusive franchises in India to bottle its total product. There are 28 bottling plant of
Pepsi in India. Some are directly controlled by Pepsi and rest is under various
franchisees.
Pepsi stands 51st position among the fortune 500 companies of the world. Its total
capital is approx $3000 crores and total sales annually is worth $37 crores. Its total profit
in the year 1996-97 was worth Rs. 458 crores approx. The total number of employees
engaged in the business is 45.25 lakhs globally.
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16. In April 1997 the Pepsi cola international decided that Steel City Beverage will
cover south Bihar (now Muzaffarpur) only. In this accordance Pepsi cola international
decided to open another bottling plant at Hajipur named Lumbini Beverages Pvt. Ltd.
Hajipur which will distribute Pepsi product in whole Bihar. Ananda Marketing as a
marketing division of Lumbini Beverages Pvt. Ltd. Hajipur started functioning in April
1997; Managing Director of Lumbini Beverages Pvt. Ltd. Hajipur is Mr. Charan Khelani.
The director of this organization Mr. Ravi Khelani and Mr. Manoj Khelani
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17. PRODUCTION PROCESS
The process of manufacture of Aerated water (soft drink) like Pepsi brand product is
divided into mainly five parts such as
1. Water Treatment
2. Syrup Making
3. Bottle Washing
4. Filling
5. Testing of Product
(1) Water Treatment: - Water treatment is very essential in soft drinks plants as
the nature and quality of water varies from place to place. To set uniform and
standard water the process of treatment is carried on. The water taken out from
bore well by the help of motor pump and pipe line are collected in storage tank
where is pre chlorinated by chlorinators and by the help of pipe lines comes to
treatment tank called coagulation tank where to this water solutions of different
strength of bleaching powder, ferrous sulphate, hydrated lime are added through
dosing pump to reduce alkalinity, hardness, kill the bacteria .The chemical are
mixed by mechanical stripper and then the suspend mattress settle down as
sludge and clear water passes to retention tank. From this tank, the water passes
through sand filter containing fine sand and pebbles and carbon filter containing
granular carbon and finely through water polisher, micron filter, and UV lamp to
ensure clear and sanitary water for use. Further water used in bottle washer and
boiler need softening .for this purpose ,the water from storage tank ,after passing
through two filter beds contain fine sand and granular carbon respectively comes
to pass through bad resin were it is softened .this soft water is essential to use in
and bottle washer to reduce scale formation inside the machines.
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18. (2) Syrup Making:- For syrup making of particular brand, calculate quantity of
sugar water activated carbon and high flow super cell known as filter aid taken in
to sugar to enter steam and also filled by a motor with agitator. Sugar syrup
called raw-syrup is prepared by dissolving the sugar with continuous stirring and
heating by steam supplied by fired boiler. This hot syrup by the help of pump is
filtered through a filter press attached with a series of quality filter paper to
separate out carbon particles. Clear hot syrup by the help of SS pipe lines passes
through water P.H.E. for cooling and the then another P.H.E. circulated by glycol
for further cooling. The chilled syrup comes to a mixing tank to use calculating
of sugar quantity by Brix Hydrometer, concentrate added and mix thoroughly by
a mechanical Stirrer fitted to the tank. This syrup is now finished syrup ready for
use. The concentrate mainly, the liquid part are kept in a cold store, the
temperature of finished syrup is also maintained by air-conditioner. All the
containers used for syrup making are cleaned and sanitized by Soda-Bi-Crab,
strong chlorine solution and hot caustic soda solution.
(3) Bottle Washing: Bottle washing is an important part in soft drink plant. The
empty durable and returnable bottle used are returned from market in plastic
carats are fed to a bottle washing machine (washer). The machine has double end
system with circular chain to carry the bottles. Caustic soda Tri-Sodium
Phosphate, Sodium Glausonate is adding to the caustic by the supplied. The
Caustic tank filled in with water heated by steam supplied by the boiler. The
empty bottles enter to the hot Caustic tank in one end and after being cleaned by
hot Caustic solution and finally washed with water through spray jets fitted are
discharged in other end. The washed bottle proper inspections are SU 319 and
SU 853 used for conveyor cleaned and smooth running of chain carrying bottles.
SU 260 and SU 773 is used for bottle cleaning, shining, and mold removing.
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19. (4) Filling: - Finished syrup and treated water lime are commixed to a dosing
pump which mixes syrup and water with ratio of 1:5 and the syrup mixed with
water enters to carbonator tank to mix CO2 gas, which is preserved in cylinder
for use. The cylinders are connected through CO 2 manifold to tank to use
requisite quantity of gas. To control CO2 pressure and temperature of liquid; we
used recording control (Taylor). The syrup passed through a P.H.E. which is
called itself by circulation of chilled glycol supplied chilling F-22 gas used. The
syrup being chilled easily mixed with CO2 gas and enters to filter for bottling.
The filter is connected with filling valves and lift cylinders. The lift cylinder
functions by pressure of air supplied by an air composer. The syrup is known as
beverage in this stage is filled in the cleaned bottles which are durable in nature
and returnable by buyer filling machine (filter) by a counter pressure of carbon
dioxide gas. After beverage filled in bottle it goes to the crowner where with the
help of crown crocks the bottles are sealed (crowned) to project the carbonation,
flavor, outside contamination and spoilage. The finished products are coded by a
coding machine and inspected properly by inspection light while passing through
the conveyor where finished product are accumulated enters to carat washer
machine and it is washed moves through the conveyor where finished product are
accumulated.
Then the products are kept in plastic carats which are durable in nature and
returnable by buyer, put on palates and sent to shipping for shipment. The entire
container in contact with syrup are properly cleaned and sanitized by Soda-Bi-
Carbonate, hot water, caustic soda solution and strong chlorine does.
(5) Testing of product:- Finally the finished syrup during bottle is tested in
laboratory to meet the parameters and also to get a standard and quality products
to maintain the standard and information and uniformity in products the sugar
contents and carbonation in the bottle are checked in regular intervals by Brix-
hydrometers, Refrectometer and pressure gauge. The dead weight tested is used
to calculate pressure gauge to know the correct pressure. TA & Ph are tested by
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20. digital Ph meter. Electronic digital balanced is used to weight chemical to
conduct test in lab. The purity of CO 2 is checked by CO2 purity tester. The
chlorine comparators. The microbiology test of the product and water used in
syrup making and production are also done to ensure that the product is free from
any bacteriological contamination. To conduct the micro test hot sterilizer
incubator, autoclave, pads filter membranes, media are produced and used.
The Diesel generator is operated in case of electricity failure for smooth
operation of the plant. To drawn electricity for the State Electricity Board the
transformer is used.
The steps involved in the production process are:-
⇒ First the fork lift supplies the empty bottles which are collected from the
distributions.
⇒ Then depalletising is done i.e. separating cases filled or empty bottles
from the wooden planks.
⇒ Uncasing is done by separating empty bottles from the cases/carats.
⇒ Empty bottles are then fed into the bottle washer where stream with some
chemical is used for washing.
⇒ Washed bottles are then send to the filler where premix (Composed of
syrup, treated water bulk CO2) is filled in it.
⇒ The whole concentrated is chilled with glycol before filling and then
crowning is done.
⇒ The filled bottles are passed through inkjet coder for printing price and
date.
⇒ Then again the filled bottles are send for final light inspection and from
there they are collected on a table.
⇒ Lastly the filled bottles are arranged in the crates (casing) and then
palletizing is done for storing it in the warehouse.
PREPARATION OF SYRUP
Treated water + Sugar = Flavour
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21. PRODUCT MANUFACTURED
The product manufactured by “Lumbini Beverages Pvt. Ltd. are very limited
ranges as it is not independent to diversity its products. It is a unit of Pepsi food Pvt. Ltd.
which supplies concentrates for drinks. They are:-
Products Quantity Colour Flavour
Pepsi 300 ml, 200ml Brunt sugar Cola
Mirinda 300 ml, 200ml Sun-set Orange
Mirinda 300 ml, 200ml Tetrazine Lime
Mirinda 300 ml, 200ml Tetrazine Mango
7 Up 300 ml, 200ml Colorless Lemon
Mountain Dew 300 ml, 200ml Colorless Lemon
Slice 300 ml Sunset Mango
Lehar soda 300 ml Tetrazine Lemon
Pet 1.5 lt. Brunt sugar Cola
Pet 2 lt. Brunt sugar Cola
Can 330 ml Brunt sugar Cola
Aquafina 1 lt. Colorless White
(Mineral Water)
CONSUMERS
The main consumers of these products naturally are youth. Besides the direct
consumer it is also used for the some purpose of providing it to the mass by hoteliers,
restaurant owners and various other soft drink peddlers. These products are the choice of
the new generation. Thus it can be said that it is a product of mass consumption.
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22. CHAPTER 3.
ORGANIZATIONAL STRUCTURE
History and Organizational Structure of Lumbini
Beverages Pvt. Ltd. Hajipur
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23. HISTORY AND ORGANIZATIONAL STRUCTURE OF
LUMBINI BEVERAGES PVT. LTD. HAJIPUR
History of Lumbini Beverages Pvt. Ltd.
Steel City beverages Pvt. Ltd. is situated at Adityapur Kandra Road in
Jamshedpur. “Rushabh Marketing Pvt. Ltd.” is the marketing division of Steel City
beverages. Steel City beverages Pvt. Ltd. is a mother unit and its whole marketing
activities are done through Rushabh Marketing Pvt. Ltd. Steel City beverages is one of
the Pepsi foods Bottling plants in the country and one of the three in Eastern India. The
other two Calcutta and Guwahati. But from 01-04-1997 “Pepsi Foods Ltd. India”
determines to open another bottling plant which is situated at Hajipur namely “Lumbini
Beverages Pvt. Ltd.” It is only for North Bihar.
Steel City beverages Pvt. Ltd. was established by Late Mr. Dharam Chand
Kamani in the month of June 1967. The machineries of its main plant were imported in
1968 and production started in March 1969.
Before the establishment of Steel City beverages Pvt. Ltd. Coca Cola was not
much popular among people of Bihar state as pure soft drink. Because at that time the
bottles of Coca Cola was supplied by the outsiders who were unable to make Coca Cola
popular in Bihar. So after considering the needs and desires of people Mr. Dharma Chand
Kamani brought in Bihar. With this effort Coca Cola become popular among the people
of Bihar.
But in 1977 due to the sudden change I the policies of the Government the import
license for the concentrate of Coca Cola was stopped. So Steel City beverages Pvt. Ltd.
had to walk over to Indian Concentrate Companies. They were modem food industries
supplied concentrate of double seven and non ice cream soda. In 1983 the company
introduced a cola drink “THRILL” of Mc-Dowell & Co. Ltd. in the place of Double
seven and triangular and in the very next year two soft drink “RUSH” an orange
flavoured and “SPRINT” as lemon flavoured of Mc-Dowell & Co. Ltd were introduced.
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24. Before some months “Ananda Marketing Pvt. Ltd. was the marketing division of
Lumbini Beverages Pvt. Ltd. But at this time, Lumbini Beverages Pvt. Ltd. is doing
marketing with its own name.
Thus it can be seen that Lumbini Beverages Pvt. Ltd. has made tremendous move
towards the introduction and development of soft drinks industries on the whole, and
North Bihar in particular. It has made production of perfect hygiene and standard Soft
Drink as main objective.
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25. ORGANIZATIONAL STRUCTURE OF
LUMBINI BEVERAGES PVT. LTD.
An ideal organizational structure facilities management and the operation of the
enterprise and it help the organization in achieving its goal.
In a simple term in various parts or component are interrelated or interconnected
and this way it is the established pattern or relationship among various function of the
organization in the established manner.
The managing director holds the top position. At present, the managing director of
Lumbini Beverages Pvt. Ltd. is Mr. Charan Khilani. But the overall policies regarding
management decisions and all executives function or performance look after by the day
to day decision and general administration as well as management. The MD has given the
power of attorney and authority to director Mr. Ravi Khilani. Mr. Ravi Khilani who is
well advised by the MD.
The director Mr. Ravi Khilani looks after all functional departments that sales
production, account, personnel and purchase. Though the manager all the functional
departments has specially designated as head of personnel department.
Every department has to report directly to the managing director and is
responsible to his only for working in spite of this all departments is under the control of
the director Mr. Ravi Khilani. Because he is the Chief Executive of the company cited
earlier. The overall organizational structure can be shown as:
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26. OVERALL ORGANIZATIONAL STRUCTURE OF LUMBINI
BEVERAGES PVT. LTD., HAJIPUR
BOARD OF DIRECTOR
MANAGING DIRECTOR
CEO
FINANCE PLANT P.A.M. H.R.
MANAGER MANAGER MANAGER
SHIPPING
A/C SHIFT ENGINEER COORDINATOR H.R.
ASSISTANT EXECUTIVE
WORKER /
A/C CLERK OPERATOR H.R.
ASSISTANT CLERK ASSIS.
HOS
T.D.M. M.E.M. M.D.M. Q.C.
.
A.D.C. SENIOR TECHNICIAN M.D.C.EXECUTIVE
C.E. TECHNICIAN M.E.
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28. The marketing manager is in charge of all marketing activities i.e. sales promotion,
publicity and advertisement, marketing study and shipping. But the main function of the
marketing is to exercise the control over the channel of distribution.
The marketing manager is assisted by sales executives, city sales executives and
rural sales executives and sales executive of shipping department as follows:-
DIRECTOR
MANAGING DIRECTOR
HEAD OF SALES
STATISTICIAN CITY SALES SALES SALES
EXECUTIVES EXECUTIVES SUPERVISOR
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30. A THEORETICAL FRAME WORK OF CHANNEL OF
DISTRIBUTION
“Marketing channels are sets of interdependent organization involved in the
process of making a product or service available for use or consumption.”
The main objective of the marketing process is to distribute the products to the
actual users. This function involves a number of sub-functions to be performed by a
producer or manufacturer. These two functions are most important first, the creation of
demand is made through the process of advertising and sales promotion activities. On the
other hand the distribution through the channels of distribution. The decision relating to
the channel of distribution is a very important decision from the firm point of view
because the selected channels affect considerable other marketing decision. Such
decisions are of long term nature and exercise their impact on the cost structure of the
firm also.
By channel distribution mean the intermediaries or the process through which the
goods products are transferred from the producer to the ultimate users.
Now a day any of the producers possibly do not sell their goods directly to the
final users. There are a lot of intermediaries between producers and consumer, bearing a
variety of name performing various kinds of function. Some intermediaries like
wholesalers and retailers buy and resale taking the bill. They are known as merchant
middle men and other are brokers, representative sales agent who seeks or search for
customers and negotiate on the behalf of the producer but do not take of goods. These are
called as middlemen.
The manufacturer and its distributive outlets share common objective to sell the
manufactured products at a profit. No doubt its objective differs with the marketing
circumstance. Even though many variation of specific objective fits into some categories.
These are as follows:-
To built distribution network loyalty
To stimulate distribution
To develop managerial efficiency in distribution organization
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31. To identify the source of supply for the product line at the final buyers level
The channel of distribution is a structure which organized and presents a choice
among alternative channels of distribution of the different marketing situations faced by
retailers, whole sellers and producers with in the structure. It may be considered as a
series of function which must be performed in order to make producers efficiency.
To bearing maximum profits of all institutions concerned a channel of distribution
should be treated as a unit of total system of action. The activities of the manufacturer
need to be coordinated with these middlemen used in the distribution of given product.
The important of middlemen in channel of distributional can be over emphasized.
It is that who-
1. Collects concentrates the output of various producers,
2. Subdivides these into lot desired by the customers gathers various items together
in the assortment wanted and
3. Disperses the assortment to consumer industrial buyers.
The role of middlemen that of specialist in concentration equalization and dispersion
besides he side in the creation of the time from and procession utilities.
31
32. DECISION MAKING FOR CHANNEL OF
DISTRIBUTION
The marketing executive must undertake to following steps in order to establish
the channel of distribution for a company.
1. He/She must understand the retail and wholesales market and type of middlemen
available in both.
2. He/She must understand the various conflicts which continually exist between and
within the channel.
3. He/She must select the general channel to be used keeping in mind the goals of
the company marketing programme and the job to be done by distribution system.
4. He/She must take decision regarding be intensity of the distribution (i.e. the
number of middlemen) to be used each level and each market.
5. He/She must select the specific firms which will handle his product and then
manage the day to day working relationship with them.
6. He/She must determine the methods and the procedure in firms (i.e. use of the
transportation and warehouse facilities and services in firms making programme)
in the physical distribution of the product.
Types of Marketing Channels
1. Direct marketing channel : A marketing channel that has no intermediaries level
2. Indirect marketing channel : Channels containing one or more intermediaries
Customer Marketing Channels
Channel 1. Manufacturer………………………………………………..…Consumer
Channel 2. Manufacturer……………Retailer……………………………Consumer
Channel 3. Manufacturer……...Wholesaler………….Retailer…………Consumer
Channel 4. Manufacture…….Wholesaler……Jobber……Retailer…….Consumer
32
33. CHANNEL DYNAMICS
Distribution channel do not stand still. New wholesaling and retailing institution
emerge and new channel system evolves. There are four types of marketing channels.
1. Conventional Distribution Channel
A Channel consist one or more independent wholesaler and retailers. Each is a
separate business seeking to maximize its own profits even if this goal reduces
profit for the system as a whole. No. of channel members has complete or
substantial control over the other members.
2. Vertical Marketing Channel
This is most recent marketing channel. A distribution channel system as
producers, wholesaler and retailers act as unified systems. One channel member,
the channel captain owns the others or franchises them or has so much power that
they all co-operate. The channel captain can be the producer, the wholesaler or the
retailer.
3. Horizontal Marketing Channel
A distribution channel system in which two or more unrelated companies put
together resources or programmes to exploit an emerging marketing opportunity.
4. Multi Channel Marketing
In the past, many companies sold to single market through a single channel. Multi
channel marketing occurs when a single firm uses two or more marketing
channels to reach one or more customer segments.
33
34. RETAILING
Includes all the activities involved in selling goods or services directly to final
consumers for personal non-business use. A retailer or retail store is any business
enterprise whose sales volume comes primarily from retailing.
Retailers are the last but not the least in the marketing channel through whom the
eventual transfer of ownership of goods take place. The use of retailer boils down to their
superior efficiency in making goods widely available and accessible to target markets. In
most of the cases the retailers performs the important functions mentioned as under.
1. Information
2. Promotion
3. Negotiation
4. Ordering
5. Financing
6. Risk Taking
7. Physical Possession
8. Payment
9. Title
The major types of retailer are as following:-
1. Specialty Store: - They sell narrow product line with deep assortment.
2. Departmental stores: - They sell several product line with each line operated
as separate department managed by specialist buyers or merchandisers.
3. Super market: - They are relatively large, low cost, low margin, high volume
self service operation designed to serve total needs for food, laundry and
household maintenance product.
4. Convenience Store: - These are relatively small store located near residential
areas, open long hours, seven days a week and carrying an united lines of high
turn over convenience products at slightly higher prices.
34
35. 5. Discount Store: - These sell standard merchandise at lower prices with lower
margins and higher volumes.
6. Off price Retailers: - These sell the merchandise which are bought at less
than regular wholesale prices and sold as less than retail. These may be of
three types mentioned as under:
a) Factory orders
b) Independent off price retailers
c) Warehouse clubs ( Wholesale clubs )
35
37. Channel of Distribution of Lumbini
Beverages Pvt. Ltd. Hajipur, in Patna
To make its products available at the right places at the right time in the market,
the sales department of the company pays major attention on controlling the channels of
distribution.
Single type of markets channel is maintained by the company right from its
pioneering stage. The nature of the channel is as follows:-
Company
Distributors
Dealers
Different Outlet Owners
Consumers
At first the soft drinks supplied to the distributors directly. Retailers or owners of
any outlet can not take the delivery from company. They have to take the products from
their respective or nearest distributor.
There are about 50 distributors and innumerable number of retail outlets operating
with the company in its entire market areas which contains total Bihar. In all the
important places of entire territory this company has its distributors.
These distributors selected on the basis of assurance given by them regarding the
minimum sales which they have to maintain annually. The selection is also done on the
basis of the financial position and reputation of distributor in the market. As for example
in appointing a distributor first engaged in soft drink business second priority is given to
those people who are in cigarette selling business. Depending upon the market, each
distributor in the initial stage has to deposit some security money.
37
38. The retailers are selected by the distributor fixed criteria for the selection or
appointment or retailers from the side of the distributor. Any one like Panwala,
Cigarettewala or any other shopkeeper can have the stall for the sale of soft drinks and
they are called retailers or outlet owners. They have to give assurance to the concerning
distributor for better sale and at the time of taking delivery they have to deposit the
security i.e. the charges if the empty bottles with specified retailers purchasing price. The
charges if the empty bottles with specified retailers purchasing price. The distributor at
first has to seek the permission of sales department for the number of cases of soft drinks
required by them. After getting the proper authority from sales department paying the
requisite amount either cash or demand draft.
38
39. WAREHOUSING
Every company has to store its finished goods until they sold. A strong facility is
necessary because production and consumption cycles rarely match.
Warehousing is not a simply storing activity but a package of services that
enables the smooth running of the industry.
The stores must be in constant touch with the use department in order to provide
uninterrupted services to the manufacture and its decision since working capital is locked
up in the warehousing stores in equal to money.
The stores functions can be organized in the following manner:-
a) To receive raw material components equipments etc.
b) To meet the demand of use department by issuing the order
c) Accounting the transaction properly.
d) Minimizing obsolescence surplus and scrap by right identification and
using correct preservation method.
The company supply finished products frequently to different distributors as per
the demand.
Every distributor keeps a minimum stock of different products of the product line
so that the uninterrupted supply could not affect.
In the industrial sector service of optimization where boils down to any exercise
of optimization where limited available resources are to be distributed equitably.
The problem arises from the material that are in stock the form of capital cost,
storage loss, pilferage obsolescence, insurance, handling, documentation etc. Services
level that can be maintained and hence the concept stores in money should be understood
by every body in the organization.
39
40. INVENTORY DECISION
(1) Branding and Packaging
Out of the total market activities some are directly performed and
controlled by
“Lumbini Beverages Pvt. Ltd.” itself some are followed according to the
standing instruction of “Pepsi Foods Pvt. Ltd.
So far as the process of branding and packaging is concerned the
“Lumbini Beverages Pvt. Ltd.” Along with the authorized bottle in India adopt
the same pattern.
(2) Wholesaling
Wholesaling includes all the activities involved in selling goods or
services to those who buy for resale or business use. Manufactures use
wholesalers because wholesalers can perform function better and more cost
effectively than the manufacture can. These functions are not limited to selling
and promoting, buying and assortment building bulk barking, warehousing,
transporting financial risk bearing dissemination of marketing information and
provision of management services and consulting.
Like retailers wholesaler must decide on target market, product assortment
and services promotion and place. The most successful wholesalers are those who
adopt their services to meet and target customer’s needs, recognizing that existing
to add value to the channel.
40
41. (3) Retailing
Retailing includes all the activities involved in selling goods or services
directly to find consumer for their personal non-business use. A retailer or retail
store is any enterprise which sales volume comes primarily form retailing.
All marketer retailers must prepare marketing plans that include decision on target
market.
So the marketing channels can be viewed as a set of interdependent organization
with high potential for conflict. Then why would any business chosen to become
part of channel system.
41
42. TRANSPORTATION
Transportation is life blood of business management and commerce. The purchase
office’s job in incomplete until and unless he ensures that the material is shipped from the
vendor’s premises located in different areas to his organization. Purchasing the
transportation is a key element in his job particularly in the context of the transportation
cost.
In deciding to transporting models shippers can choose from private contract and
common carriers.
Transport decisions must consider the complex trade off between various
transportation mode and their implications for other distribution elements such as
warehousing and inventory.
42
43. DISTRIBUTION OF PEPSI
Here there are four systems of distribution channels.
Channel 1. Manufacturer…………………………………………………Consumer
Channel 2. Manufacturer……………Retailer…………………………..Consumer
Channel 3. Manufacturer………Wholesaler………….Retailer…………Consumer
Channel 4. Manufacture…….Wholesaler……Jobber……Retailer……..Consumer
Channel of distribution of Lumbini Beverages Pvt. Ltd.
By Lorry or Truck
Distributor
Dealers of customer
43
44. PERFORMANCE OF PATNA
Patna has a significant role for Pepsi, in products are supplied by “Lumbini
Beverages Pvt. Ltd., Hajipur.’
There are more than eight hundred including exclusive and nonexclusive outlets
of Pepsi in proper Patna. The highest sale of this year __________ cases was in the
month of May and total sale of this year was……………..cases so far.
Hierarchy is also necessary to understand the capacity of Patna town.
HIERARCHY OF PATNA
Distributor
Consumer Executive
Sales Man
Accountant
Vehicle
Loader and Unloader
44
45. STUDY ON PRODUCTS
Product line is a group of product, that are closely related because they satisfy a
class of needs or used together or sole to the same customer groups or marketed through
the same types of outlets or fall within given price range. Lumbini Beverages Pvt. Ltd.,
has the following product line:
Name Colour Flavour
Pepsi Brunti Cola
Mirinda Sunset Orange
Mirinda Tetrazine Lemon
Slice Sunset Mango
7’Up Colourless Lime
Dew Colourless Lime
Lehar Soda Tetrazine Lemon
45
46. PRICE SHEET
OUTLET RATE C.RATE
FLAVOUR PACK PCS RATE PER RATE PER
SIZE PCS PCS
RATE RATE
PEPSI COLA 200 ML 24 168 7 192 8
PEPSI COLA 300 ML 24 214 9 240 10
PEPSI COLA 600 ML 24 454 19 480 20
PEPSI COLA 2000 ML 9 459 51 495 55
MIRINDA 200 ML 24 168 7 192 8
ORANGE
MIRINDA 300 ML 24 214 9 240 10
ORANGE
MIRINDA 600 ML 24 454 19 480 20
ORANGE
MIRINDA 2000 ML 9 459 51 495 55
ORANGE
MIRINDA 200 ML 24 168 7 192 8
LEMON
MIRINDA 600 ML 24 214 9 240 10
LEMON
7UP 200 ML 24 168 7 192 8
7UP 300 ML 24 214 9 240 10
7UP 600 ML 24 454 19 480 20
7UP 2000 ML 9 459 51 495 55
MOUNTAIN 200 ML 24 168 7 192 8
DEW
MOUNTAIN 600 ML 24 454 19 480 20
DEW
MOUNTAIN 2000 ML 9 459 51 495 55
DEW
SLICE 250 ML 24 214 9 240 10
SLICE 500 ML 24 498 21 552 23
SLICE 1200 ML 12 532 44 576 48
MY CAN 250 ML 24 330 14 360 15
PEPSI DIAT 330 ML 24 564 23.5 600 25
SLICE 200 ML 30 285 10 360 12
TETRAPACK
LEHER SODA 300 ML 24 214 9 240 10
LEHER SODA 600 ML 24 454 19 480 20
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47. STUDY ON RETAILERS
Retail Shop type
I. Monopoly Retail Shop : The shop selling only one company’s
Products
II. Mix Shop : The shop selling many company’s
Products
The retailers can build a great deal of goodwill for the firm. The marketing
strength depends on the strengths of retail dealers.
Research has conduct survey on different types of outlet like bakeries, cold drink
parlor, Booth and general stores etc.
According to his survey, the major reasons for selling Pepsi products are:
(1) Brand Image 18%
(2) Customer Demand 20%
(3) Profit Margin 05%
(4) Advertisement 30%
(5) Good Quality 10%
(6) Sales Promotion for Retailers 07%
(7) Sales Promotion for Consumers 10%
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48. BRAND PREFRENCE
Pepsi products are most popular brand but Coke products are very dear brand of
consumers due to advertisement.
After the collection of different views from consumer which includes,
servicemen, students, and businessman and observing the sale of Pepsi products. The
research has calculated the preference consumption of different Pepsi products by the
people of PATNA
Brand Preference of Consumers
Flavour % Consumption
Cola 49%
Orange 16%
Lemon 12%
Lime 07%
Mango 17%
15%
17% Cola
49%
Orange
Lem on
Lim e
Mango
7% 7 Up
12%
16%
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49. STUDYING THE MARKET POTENTIAL
The market potential is an estimate of the maximum possible sales opportunities
present in a particular market segment and open to all sellers of a good and service or
during a stated future period. A market potential indicates how much of a particular
product can be sold to a particular market segment. Market potential can be determined
by measuring the sales in different areas.
The data has collected from 100 outlets, which are situated in different areas of
Patna. According to that, the per day sale of Pepsi Products is 154 carats and the per day
sale of sale of Coke Products is 148 crates.
Per Day Sales in Crate of Products
Coca Cola
48% Pepsi
Pepsi Coca Cola
52%
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51. Conclusion and Suggestion
In the earlier chapters of this report on various aspects of soft drinks industry with
particular reference to establishment of ‘’Lumbini Beverages Pvt. Ltd.’’ Its
organizational structure and channel of Distribution Lumbini Beverage Pvt. Ltd. etc have
been studied Present chapter is an attempt to summaries the whole report and present a
view suggestion.
From the data analysis and survey conducted by me, I arrived at the following
conclusions:-
(1) Pepsi has the entire flavor i.e. Cola, Leman, Orange, Mango in the market and its
market share is comparatively more than Coke.
(2) The majority of the retailers deal in all brands of Pepsi and Coca-Cola.
(3) One of the major drawbacks of Pepsi products is that all the flavors do not reach
at each and every retail outlets but competitors products do reach that is why
competitor enters in to Pepsi exclusive outlets .
(4) The major problem faced by the distributor is the shortage of supply particularly
pets.
(5) Distributor functions just as order takes; they should contribute me and
communicate to the retailers.
(6) It should be checked that whether our products is reaching to the outlets timely
and regularly or not.
(7) Although the Visi-cooler, Sign board/Display rack and Glass strength provided
by Pepsi are more than Coke but still there are number of retailers, who are
either not having these or others have provided them .
(8) There is irregular in the supply of Visi-cooler, some retailers, which sell more
are not provided Visi-cooler which some retailers, which sell less, are provided
visi-cooler.
(9) Some of the Visi-cooler provided by Pepsi is not functioning properly,
complaints regularly, are entertained after a long time.
(10) Most of the retailers are in need of board but not provided by the Pepsi
Company.
(11) Most of the retailer’s especially small retailers have complained that the sales
man does not inform about any sales promotional scheme.
(12) The big retailers of Pepsi do not maintain the purity in the Visi-cooler and
dictate their own terms and conditions.
.
51
52. Suggestions
Lumbini Beverages Pvt. Ltd. should introduce some change in its marketing
function and advertising to market more rational. The following factors to be worthy of
consideration:-
1. A complain Register should be provided by the company to every distributor in
every route so that, retailers/customers can write their problems. The complain
register should be checked by consumer executive and depot in charge at time to
time.
2. A clear notification should be given to teach distributor and each route agent to
give cash memo (with printed number) and maintain route card for every
transaction.
3. Proper care should be given the company’s employees at the time of scheme
close. Signature of scheme receiving on the cash memo should be taken and it
should be also maintained in route card. Claim of scheme should be passed after
the deeply stud y of above three points i.e. difference between opening stock and
closing, signature of scheme receiving on the cash memo and sells maintained in
the route card.
4. Some retailers keep other companies products in the Pepsi’s fridge, while is
provided by the company. To check additional scheme be given in every month,
in the peak seasons After the checking of Pepsi’s Fridge (3or 4 times in every
month ) if It is found that retailer does not keep other companies products in the
Pepsi’s Pepsi fridge the claim of scheme should be passed . Thus we can
improve/increase its sell and employee’s activities.
5. There is no electricity problem in the whole area of Patna. For chilled soft drink,
ice box which is compulsory and dredge both should be provided by the
company.
6. The numbers of outlets are too much. So it is required to short the route and extra
vehicles/tricycles provide in this route.
7. Facilities provided by the company should be increased. Facilities requirements
should be fulfilled in all the rural and urban area properly after deeply study for
various aspects or retailers by the help of company employee and depot incharge.
8. Number of tricycle can be installed at various place like public during the peal
hours i.e. evening and busy roads and chowks near the town`s commercial
52
53. centers. Care should be taken to install these tricycles under a shady tree where
providing relief from h eat to the prospective customers as well as the vendor.
9. All these tricycles targeted the tired and thirsty consumer or the road and other
place, care should be taken that soft drinks in the ice box are always chilled and
ice readily available.
10. The vendors must be taught to be polite to the consumers.
11. The vendors can also be provided with uniform by the company in order to give
them visibility.
12. An appropriate name should be given to these tricycles and properly
advertisement thus giving them some sort of identity.
13. In winters, as the sales from these tricycles may be very low because of seasonal
factors Beverages Pvt. Ltd. should think of introducing such packs Beaver its
various brands of beverages .
14. It is vital take for “Lumbini Beverages Pvt. Ltd. that maintain the performance
of Pepsi in future therefore performance of soft drink was very good in this year
in comparison of coke.
15. Now a day with the introduction of tetra packs such as fruity, Tree Top etc. So
Lumbini Beverages Pvt. Ltd. should think of introducing such packs of its
various brands of beverages.
16. Lumbini beverages Pvt. Ltd. should be provided it’s the rural area also.
17. Coke is the only competitor of Pepsi. So we should try to keep every information
about Coke i.e. prices scheme, policy etc. always it will help in Decision making.
At last only this can be said that these suggestions are mot totally but even
partially can be used by the Lumbini Beverages Pvt. Ltd. it would be pleasure for me and
is certain that if these are carried out by management , it will helpful in establishing the
Lumbini Beverages Pvt. Ltd. on a more stronger footing.
53
54. QUESTIONNAIRE
Name: - …………………………………………………………………………………..
Address: - ………………………………………………………………………………..
………………………………………………………………….......................
Contact No: - ……………………………………………………………………………
(1) Monthly sales (in Rs.)
(a) Less than 5000 (b) Between 5000 to 10,000
(c) 10,000 to 15,000 (d) Above 15,000
(2) Number of carets sold per month of soft drinks.
(a) 0 - 50 carets (b) 50 to 100 carets
(c) 100 to 150 carets (d) 150 to 200 carets
(3) Which type of outlet?
(a) General Store (b) Grocery
(c) Betel Shop (d) Sweet Shop
(4) Which brands of soft drinks are available in the outlet?
(a) Pepsi Cola (b) Mirinda (O)
(c) Mirinda (L) (d) 7’Up
(e) Slice (f) Mountain Dew
(5) When a customer comes to your shop which brand of soft drinks does he/she
demands? (Rank them)
(a) Pepsi (b) Coca Cola
(c) Others
(6) Do you know about all flavours pack (size) and respective wholesale price Pepsi
soft drinks.
(a) Yes (b) No
(7) Which company’s soft drink is demanded most?
(a) 0 - 50 carets (b) 50 to 100 carets
(c) 100 to 150 carets (d) 150 to 200 carets
(8) What is the position delivery of Pepsi products?
(a) Very Good (b) Good
(c) Bad (d) Worse
54
55. (9) What is the frequency of the visit of Pepsi executive?
(a) Daily (b) Alternate Day
(c) Weekly (d) Fortnightly
(10) Which factors affect the sale most?
(a) Advertisement (b) Scheme
(c) Presence (d) Taste
(e) Price (f) Others
(11) Which company Visi-Cooler do you have?
(a) Pepsi (b) Coca Cola
(c) Both (d) Own
(12) What is the position of maintenance work of refrigerator done by Pepsi
Company?
(a) Highly satisfactory (b) satisfactory
(c) Less satisfactory (d) Not satisfactory
(13) Have you been provided with sign board/display rack by Coke Company?
(a) Yes (b) No
(14) Have you any type of dissatisfaction regarding the product. It yes then why?
………………………………………………………………………………
(15) Please give any suggestion for improvement regarding distribution, brand,
bottling etc. ………………………………………………………………………………
………………………………………………………………………………...
………………………………………………………………………………………
(16) What is your opinion about Pepsi products?
……………………………………………………………………………………
……………………………………………………………………………………
Thank You
Place:-…………………… Surveyed by
Date:- ……………………
55
