“ Market Survey Of PepsiCo Retailers On Merchandising Effectiveness”


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 The project was undertaken at PepsiCo India Holding Limited, Bangalore. The duration of the project was two months. The major task was to find out the merchandising & product display in the retail outlet & relation between company & its retailers and to check the Plano gram norms, whether retailers followed it properly or not in order to handle the grievances of consumer and retailer.
 I was also assigned the task to suggest remedial measures to correct the problem and my suggestions was also implemented which resulted into that PepsiCo now providing monthly Brand display scheme to its retailer for proper display of their product in the retail outlet.

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“ Market Survey Of PepsiCo Retailers On Merchandising Effectiveness”

  1. 1. Pepsi Co India Holding Ltd. A Project Report on “MARKET SURVEY OF PEPSICO RETAILERS ON DISPLAY EFFECTIVENESS” BY GOVINDA BISWAS 1PI09MBA32 Submitted to VISVESVARAYA TECHNLOGICAL UNIVERSITY, BELGAUM In partial fulfilment of the requirements for the award of the degree of MASTER OF BUSINESS ADMINISTRATION Project work carried out at PEPSICO INDIA HOLDING LIMITED, BANGALORE Under the guidance of Mr. MURALI MURTI UMA MOORTYProfessor, PESIT MBA Program Territory Development Manager Bangalore PepsiCo – Bangalore City Department of MBA PES INSTITUTE OF TECHNOLOGY, BANGALORE-560085 (2009-2011 Batch)Department of MBA, PESIT, Bangalore Page 1
  2. 2. Pepsi Co India Holding Ltd. DECLARATIONI, GOVINDA BISWAS hereby declare that the summer project report titled “MarketSurvey of PepsiCo Retailers On Display Effectiveness” written and submitted toVisvesvaraya Technological University, Belgaum by me is my own and its equal copy hasnot been reproduced to any other institution/ university or published anywhere else.I understand that such reproducing is liable for punishment in any way the university deemfit.Place: Bangalore GOVINDA BISWASDate: USN :1PI09MBA32Department of MBA, PESIT, Bangalore Page 2
  3. 3. Pepsi Co India Holding Ltd. ACKNOWLEDGEMENTIt is human bound duty to acknowledge those personalities who contribute immensely to hisefforts and guide him in the right decision in his ambitious endeavours.I would like to take this opportunity to express my heartfelt gratitude to my guide professorMurali Murti, PESIT, Bangalore who with his encouragement and co-operation helped me inmaking this project a great success.My sincere thanks to my parents and all the people who have helped me in making this reportsuccessful. I would also thank my fellow students for their constructive criticism and valuableinformation shared.I would like to thank Territory Development Manager, PepsiCo, Bangalore Miss Uma Murthifor having provided me an opportunity to undertake my project in his organization.I would like to thank my guide at the company Mr. Sathya Swaroop for sharing his valuableexperience and knowledge.Last but in no way the least, I wish to express my thanks to express my thanks to al mythanks to all respondents who have co-operated in providing the necessary information forthe successful completion of the project.Department of MBA, PESIT, Bangalore Page 3
  4. 4. Pepsi Co India Holding Ltd. EXECUTIVE SUMMARYBeverage industry is one of the fast growing industries in India. It can be divided into 2section i.e. carbonated & non-carbonated. The carbonated drink further classified into cola,lemon, orange, mango & apple segments. Marketing includes all the activities like promotion,distribution, advertising etc. To fulfil the all segment of consumers marketing is also toconvert social needs into profitable opportunities.The project is - “Market Survey of PepsiCo Retailers on Display Effectiveness”PepsiCo are facing problem regarding product availability in visi-cooler & display of theproduct in the premises of the outlet. So as a result the sale of the product has not beenachieving the sales target set by the company.So this topic provides the entire essential to theoretical knowledge & to inculcate theefficiency. It also requirement for the company to improve their service & quality forachieving their ultimate goal.The topic has been given by the company to collect information about the current status ofthe visi-cooler that is given by the company to the retailer for selling of every brand softdrink of PepsiCo.The main objective of the research was to know the company‟s position in the soft drinkmarket by doing visi-purity & charging of every visi-cooler.This study covers survey of PepsiCo retailers on display effectiveness. During my study Icovered all the major areas of the Bangalore city. I surveyed around 100 retail outlets. Thisstudy covers all the major dimensions considered essential for proper sales andmerchandising management. Some of them include sales support, trade scheme, profitmargin, effective service, providing signage boards etc. Coming out with new attractiveschemes and looking after the proper re-imbursement on trade schemes are very muchessential steps to be taken by PepsiCo. The retailer in the Bangalore city seems to be unhappywith the support material provided by PepsiCo, which it has to look into immediately.Company executives must try to build good relationship with the retailers by addressing theirproblems continuously.Department of MBA, PESIT, Bangalore Page 4
  5. 5. Pepsi Co India Holding Ltd. CONTENTS PART-ACHAPTER TOPIC PAGE NO. 1 INDUSTRY PROFILE 1.0 Soft drinks 1 1.1 Growth of soft drink industry in India 1-2 1.2 Overview of soft drink industry in India 2-3 1.3 Snapshot of soft drink industry in India 3 1.4 Future Prospect 4 2 COMPANY PROFILE a) Background and inception of the company 5-10 b) Nature of business carried 11 c) Vision, mission & quality policy 11 d) Product profile 12 e) Area of operation 13 f) Ownership pattern 13 g) Competitor‟s information 13 h) Infrastructural facility 14 i) Achievement and award 14 j) Workflow model 15-16 k) Future growth and prospect 17 3 MCKINSEY’S 7S MODEL 18-36 4 SWOT ANALYSIS 37-38 5 ANALYSIS OF FINANCIAL STATEMENTS 39-40 6 LEARNING EXPERIENCE 41Department of MBA, PESIT, Bangalore Page 5
  6. 6. Pepsi Co India Holding Ltd. PART-B 7 GENERAL INFORMATION Statement of the problem 42 Objective of the study 42 Scope of the study 43 Methodology of the study 43-44 Limitation of the study 45 8 ANALYSIS, INTERPRETATION AND FINDINGS 46-60 9 CONCLUSION& RECOMMENDATION 61-62 10 ANNEXURE 11 BIBLIOGRAPHY 63Department of MBA, PESIT, Bangalore Page 6
  7. 7. Pepsi Co India Holding Ltd. LIST OF TABLESTable No. Chapter No. Description Page No. 5.1 5 Ratio analysis 39 8.1 8 Types of outlet visited 46 8.2 8 Most sold brand of PepsiCo 47 8.3 8 No. of times shortage faced by the retailers 48 8.4 8 Schemes which attracts the retailers 49 8.5 8 Status visi-charging on a average customer 50 visit 8.6 8 No. of crates sold per day 51 8.7 8 ANOVA test on impact of seasonal sales 52 and merchandising on actual sales 8.8 8 Chi-square test on relation between problem 53 sort out and brand satisfaction 8.9 8 Contingency coefficient test 53 8.10 8 Lamda test 54 8.11 8 Relationship between sales and independent 55 variables 8.12 8 Statistical significance (Wilks Lambda test ) 56 8.13 8 Standardized Canonical Discriminant 57 Function Coefficients 8.14 8 Canonical Discriminant Function 57 Coefficients 8.15 8 Unstandardized coefficients 58Department of MBA, PESIT, Bangalore Page 7
  8. 8. Pepsi Co India Holding Ltd. LIST OF GRAPHS Graph No. Chapter No. Graph. Page No. 2.1 2 Work flow model 15 3.1 3 Mckinsey‟s 7S model 18 3.2 3 Organizational structure of 20 PepsiCo, Bangalore 3.3 3 Distribution system of PepsiCo 31 8.1 8 Types of outlet 46 8.2 8 Most sold of brand of PepsiCo 47 8.3 8 No. of time shortage faced 48 8.4 8 Types of schemes 49 8.5 8 Status of visi-charging 50 8.6 8 No of crates sell per day 51Department of MBA, PESIT, Bangalore Page 8
  9. 9. Pepsi Co India Holding Ltd. LIST OF ANNEXURES Annexure Description Page No. A Financial Statements of PepsiCo, i Bangalore B Questionnaire for retailers ivDepartment of MBA, PESIT, Bangalore Page 9
  10. 10. Pepsi Co India Holding Ltd.1.0 Soft drinksSoft drinks is any a beverage that is not alcoholic or intoxicating and is usually carbonateddrinks. Although carbonation is not required, most people think of soft drinks as beingeffervescent. A soft drink is a beverage, often carbonated, that does not contain alcohol.Carbonated soft drinks are more commonly known as soda, pop, tonic or soda pop in parts ofthe United States and Canada or fizzy drinks in the U.K; sometimes called mineral in Ireland.1.1 Growth of soft drinks in indiaThe name “soft drinks” specifies a lack of alcohol by way of contrast to the term “harddrink”. The term “drink”, while nominally neutral, often carries connotations of alcoholiccontents. A soft drink is a non- alcoholic beverage. It is artificially flavored and contains nofruits or pulp.India with population of more than 1billion is potentially one of the largest consumer marketsin the worlds after China. The consumer market can be defined as the market for product andservices that are purchased by individuals as household goods for their personal consumption.A soft drinks is a typical consumer product purchased by individuals, first to quench thirstand secondly for refreshment. Searching for the starting point of Indian soft drinks, let us firstdocument on Gold Spot, this was the first soft drink brand in India. It was introduced byPARLE during later part of 40‟s.Cola giant‟s Coca-Cola was the first foreign soft drink to be introduced in India in 1965,Coca-Cola made a very good beginning and dominated the whole scene right from the wordgo. It faced no competition at that time. Coca-Cola re-entered India in the year 1993 incollaboration with PARLE INDIA LIMITED.The marketing did not even need to publicize Coca-Cola for it sold first like hot cakes. Thisextraordinary success of soft drinks can be attributed to the following factors –  Absence of cotemporary competitive brand.  Euphoric image built up in the Western countries preceded the entry into Indian market.  Indians are very fond of foreign goods, services etc due to prolonged foreign rule.Parle Export Ltd, later in 1970 introduced Limca, Lemony Soft drinks, Pepino which theyhad to soon withdraw in the face of confrontation with Coca-Cola.Three of four groups of Indian companies who had the required production capacity startedtheir own production of Cola, lemon, orange, but failed to achieve their goal on a nationalbasis. India always have love and hate relationship with MNC‟S which gave significantopportunities to soft drink industries in India when Coca-Cola decided to windup itsoperation in 1977 rather than bowing to the Indian government insisting on :Department of MBA, PESIT, Bangalore Page 10
  11. 11. Pepsi Co India Holding Ltd.  Dilution of equity, as the government felt that lots of foreign currency was being wasted.  Manufacturing of the top-secret concentration in India.  Disclosing of the chemical composition of the essence.This left a large vacuum in the popular soft drink market and a vista was opened to anycompany with the requisite technical, marketing and organizational skill. The exit of Coca-Cola from India in 1977 accelerated the growth of several Indian soft drinks. New soft drinksin the form of tetra pack entered in the market; among them Frooti, Jump-In and Treetopwere the prominent once. Till 1977 their equipped bottling plants and the distributionnetwork a longing to be of no use. It took them one year to develop new formula to surviveand gradually came up with Campa, Lemon, Orange and Cola that order.However Parle, the pioneer in the soft drinks, blazed its way to national prominence withtheir product “Thumps Up‟‟ bearing the slogan “Happy Days Are Here Again‟‟. Thisparticular slogan helped to win over the loyalists or addicts to Coca-Cola, who was in thestate of “Cola Shock” or Cola Depression. Soon the Indian soft drink industry started at aphenomenal rate and Parle products Gold Spot, Limca and Thumps Up became the brandleader in their own segment.In spite of these, the soft drink market still has a large gap, as claimed by soft drinkmanufacturers. The Indian soft market basically offered three flavours i.e. Orange, Lemonand Cola.1.2 Overview of soft drink industry in IndiaThe Indian soft drink beverage market is dominated by Coca-Cola India and PepsiCo. Themarket had grown over the years to become the third largest consumer of beverages after theUS and China. The fact that the per capita consumption of soft drinks in India remainedamong the lowest in the world added to the high growth potential of the market. Since the1990‟s the market had witnessed many price, distribution and advertising wars between twocola giants as they fought hard to grab a bigger share of market. The companies also had toface allegations in 2004 and 2006 that their soft drinks contain high pesticide levels. With thecontroversy behind it, both the companies were aggressively working towards increasingtheir market share in India.For a number of years the main competition in the non-alcoholic sector was the battlebetween Coke and Pepsi for the cola market. But as the customer preferences and concernsstarted to change, the industry‟s giants have relying on new product flavours and looking tononcarbonated beverages for growth. Globally, the market size of this industry has beenchanging. Soft drink consumption has a market share of 46.8% within the non-alcoholic drinkindustry. Data monitor (2005) also found that the total market value of soft drinks reached$307.2 billion in 2004 with a market value forecast of $367.1 billion in 2010.Department of MBA, PESIT, Bangalore Page 11
  12. 12. Pepsi Co India Holding Ltd.Non-alcoholic drinks companies actually see India as a potential market because of kind ofsummer India sees. The Coca-Cola Co reported its profit climbing up by 43% in the secondquarter of 2009 to two billion dollar, getting a boost from double digit unit case volumegrowth. The Indian CSD (carbonated soft drinks) market stands at 1.2 billion dollar and thefruit-based beverages and bottled water at 600 million dollar, respectively.1.3 Snapshot of soft drink industry in India1.3.1 Market sizeSoft drink market size in Financial Year 2005 was around 270 million cases (6480 millionbottles). The market witnessed 5-6% growth in the early „90s.1.3.2 Geographical distributionThe market preference is highly regional based. While Cola drinks have main market inmetro cities and northern states of UP, Punjab, Haryana etc. Orange flavoured drinks arepopular in southern states. Sodas too are sold largely in southern states besides sale throughbars. Western markets have preference towards mango-flavoured drinks.1.3.3 Distribution networkThe distribution network of Pepsi had 7.5 lakh outlets across the country in Financial Year2008. On the other hand Coca Cola Company‟s distribution network had 8 lakh across thecountry during Financial Year 2007.1.3.4 Types of soft drinksSoft drinks are available in glass bottles, tetra pack and PET bottle for home consumption.Non –alcoholic soft drink beverage market can be divided into fruit drink and soft drinks.Soft drinks can be further divided into carbonated and non-carbonated drinks. Cola, lemonand oranges are carbonated drinks while mango drinks comes under noncarbonated category.The market can also be segmented on the basis of types of products into cola products andnon-cola products. Cola products account for nearly 61-62% of the total soft drinks market.The brands that fall in this category are Pepsi, Thumps Up, Coca-Cola, Diet Coke, Diet Pepsietc. Non-cola segment which constitutes 36% can be divided into 4 categories based on thetypes of available, namely: Orange, Cloudy Lime, Clear Lime and Mango.Department of MBA, PESIT, Bangalore Page 12
  13. 13. Pepsi Co India Holding Ltd.1.4 Future prospectsThe government has adopted liberalized policies for the soft drink trade to give the industry aboost and promote the Indian brands internationally. Although the import and manufacture ofinternational brand like Pepsi and Coke is enhanced in India, the local brands are beingstabilized by advertisements, good quality and low cost.The soft drinks market till early 1990‟s was in the hands of domestic players like Campa,Thumps Up, Limca etc but with opening up of economy and entry of MNC players Pepsi andCoke the market has come totally under their control.Although the beverage industry has been in existence for quite some time now, yet it is still atan infant stage considering its size and place in the market. India stands at third number in theconsumption of the beverage, behind United States and China. It accounts for almost 10% ofglobal beverage consumption. Today, it is being looked as a country that offers the greatestpotential, even more so than China. This year, the beverage industry in India is beingestimated to grow at 17%.Department of MBA, PESIT, Bangalore Page 13
  14. 14. Pepsi Co India Holding Ltd.PEPSICO INDIA HOLDING LIMITED, BANGALORE A. BACKGROUND & INCEPTION OF THE COMPANYPepsiCo entered India in 1989 and has grown to become the country‟s largest selling foodand Beverage Company. One of the largest multinational investors in the country, PepsiCohas established a business which aims to serve the long term dynamic needs of consumers inIndia.PepsiCo nourishes consumers with a range of products from treats to healthy eats that deliverjoy as well as nutrition and always, good taste. PepsiCo India‟s expansive portfolio includesiconic refreshment beverages Pepsi, 7 UP, Mirinda and Mountain Dew, in addition to lowcalorie options such as Diet Pepsi, hydrating and nutritional beverages such as Aquafinadrinking water, isotonic sports drinks - Gatorade, Tropicana 100% fruit juices, and juicebased drinks – Tropicana Nectars, Tropicana Twister and Slice, non-carbonated beverage anda new innovation Nimbooz by 7Up. Local brands – Lehar Evervess Soda, Dukes Lemonadeand Mangola add to the diverse range of brands.The group has built an expansive beverage and food business. To support its operations,PepsiCo has 36 bottling plants in India, of which 13 are company owned and 23 arefranchisee owned. In addition to this, PepsiCo‟s Frito Lay foods division has 3 state-of-the-art plants. PepsiCo‟s business is based on its sustainability vision of making tomorrow betterthan today. PepsiCo‟s commitment to living by this vision every day is visible in itscontribution to the country, consumers and farmers.A Brief PepsiCo History In 1893, Caleb Bradham a young pharmacist from New Bern,North Carolina, begins experimenting with many different soft drinkconcoctions. Like many pharmacists at the turn of the century he had asoda fountain in his drugstore, where he served his customers refreshingdrinks, that he created himself. His most popular beverage was somethinghe called "Brads drink" made of carbonated water, sugar, vanilla, rareoils, pepsin and cola nuts.One of Calebs formulations, known as "Brads drink", created in thesummer of 1893, was later renamed Pepsi Cola after the pepsin and colanuts used in the recipe. In 1898, Caleb Bradham wisely bought the trade name "Pep Cola" for$100 from a competitor from Newark, New Jersey that had gone broke. The new name wastrademarked on June 16th, 1903. Bradhams neighbour, an artist designed the first Pepsi logoand ninety-seven shares of stock for Bradhams new company were issued.Department of MBA, PESIT, Bangalore Page 14
  15. 15. Pepsi Co India Holding Ltd.1898 - One of Calebs formulations, known as "Brads Drink," a combination of carbonatedwater, sugar, vanilla, rare oils and cola nuts, is renamed "Pepsi-Cola" on August 28, 1898.Pepsi-Cola receives its first logo.1905 - Pepsi-Colas first bottling franchises are established in Charlotte and Durham, NorthCarolina. Pepsi receives its new logo, its first change since 1898.1906 - Pepsi gets another logo change, the third in eight years. The modified script logo iscreated with the slogan, "The Original Pure Food Drink."1908 - Pepsi-Cola becomes one of the first companies to modernize delivery from horsedrawn carts to motor vehicles. Two hundred fifty bottlers in 24 states are under contract tomake and sell Pepsi-Cola.1910 - The first Pepsi-Cola bottlers convention is held in NewBern, North Carolina.1920 - Pepsi theme line speaks to the consumer with "DrinkPepsi-Cola, it will satisfy you."1928 - After five continuous losing years, Megargelreorganizes his company as the National Pepsi-ColaCompany, becoming the fourth parent company to own the Pepsi trademark.1934 - A landmark year for Pepsi-Cola. The drink is a hit and to attract even more sales,the company begins selling its 12-ounce drink for five cents (the same cost as six ounces ofcompetitive colas). The 12-ounce bottle debuts in Baltimore, where it is an instant success.The cost savings proves irresistible to Depression-worn Americans and sales skyrocketnationally.Caleb Bradham, the founder of Pepsi-Cola and "Brads Drink," dies at 66 (May 27th,1867-February 19th, 1934).1935 - Guth moves the entire Pepsi-Cola operation to Long Island City, New York, and setsup national territorial boundaries for the Pepsi bottler franchise system.1936 - Pepsi grants 94 new U.S. franchises and year-end profits reach $2,100,000.Department of MBA, PESIT, Bangalore Page 15
  16. 16. Pepsi Co India Holding Ltd.In 1940, the Pepsi Cola Company made history when the first advertising jingle wasbroadcast nationally on the radio. The jingle was "Nickel Nickel" an advertisement for PepsiCola that referred to the price of Pepsi and the quantity for that price "Nickel Nickel" becamea hit record and was recorded into fifty-five languages.1941 - The New York Stock Exchange trades Pepsis stock for the first time. In support ofthe war effort, Pepsis bottle crown colours change to red, white, and blue.1942 - One on many company sponsored efforts to allow soldiers to communicate withfriends or family. This record was made in New York City but often booths would be set upwith mobile recording equipment that was bought to where the soldiers were. Shell materialon solid core. 78 rpm.1943 - Pepsis theme line becomes "Bigger Drink, Better Taste."1948 - Corporate headquarters moves from Long Island City, New York, to midtownManhattan.1950 - Alfred N. Steele becomes President and CEO of Pepsi-Cola. Mr. Steeles wife,Hollywood movie star Joan Crawford, is instrumental in promoting the companys productline.1951-Pepsi receives its new logo, which incorporates the "bottle cap" look. The new logo isthe fifth in Pepsi history.1953 - "The Light Refreshment" campaign capitalizes on a change in the products formulathat reduces caloric content.1955 - Herbert Barnet is named President of Pepsi-Cola.1959 - Pepsi debuts at the Moscow Fair. Soviet Premier Khrushchev and U.S. Vice PresidentNixon share a Pepsi.1960 - Young adults become the target consumers and Pepsis advertising keeps pace with"Now its Pepsi, for those who think young."1962 - Pepsi receives its new logo, the sixth in Pepsi history. The serrated bottle cap logodebuts, accompanying the brands groundbreaking "Pepsi Generation" ad campaign.Department of MBA, PESIT, Bangalore Page 16
  17. 17. Pepsi Co India Holding Ltd.1963 - After climbing the Pepsi ladder from fountain syrup salesman, Donald M. Kendall isnamed CEO of Pepsi-Cola Company. Pepsi-Cola continues to lead the soft drink industry inpackaging innovations, when the 12-ounce bottle gives way to the 16-ounce size. Twelve-ounce Pepsi cans are first introduced to the military to transport soft drinks all over the world.1964 - Diet Pepsi, introduced as Americas first national diet soft drink. Pepsi-Cola acquiresMountain Dew.1965-Military 12-ounce cans are such a success that full-scale commercial distributionbegins.Mountain Dew launches its first campaign, "Yahoo Mountain Dew...Itll tickle your innards."1970 - Pepsi leads the way into metrics by introducing the industrys first two-litre bottles.Pepsi is also the first company to respond to consumer preference with light-weight,recyclable, plastic bottles. Vic Bonomo is named President of Pepsi-Cola. The Pepsi WorldHeadquarters moves from Manhattan to Purchase, NY.1974 - First Pepsi plant opens in the U.S.S.R. Television ads introduce the new theme line,"Hello, Sunshine, Hello Mountain Dew."1976 - Pepsi becomes the single largest soft drink brand sold in American supermarkets. Thecampaign is "Have a Pepsi Day!" and a classic commercial, "Puppies," becomes one ofAmericas best-loved ads. As people get back to basics, Pepsi is there as one of the simplethings in life.1977 - At 37, marketing genius John Sculley is named President of Pepsi-Cola.1978 - The company experiments with new flavours. Twelve-pack cans are introduced.1980 - Pepsi becomes number one in sales in the take home market.1981 - PepsiCo and China reach agreement to manufacture soft drinks, with productionbeginning next year.1982 - Pepsi Free, a caffeine-free cola, is introduced nationwide. Pepsi Challenge activityhas penetrated 75% of the U.S. market.Department of MBA, PESIT, Bangalore Page 17
  18. 18. Pepsi Co India Holding Ltd.1984 - Pepsi advertising takes a dramatic turn as Pepsi becomes "the choice of a NewGeneration." Lemon Lime Slice, the first major soft drink with real fruit juice, is introduced,creating a new soft drink category, "juice added." In subsequent line of extensions, MandarinOrange Slice goes on to become the number one orange soft drink in the U.S. Diet Pepsi isreformulated with NutraSweet (aspertame) brand sweetener.1985 - After responding to years of decline, Coke loses to Pepsi in preference testsby reformulating. However, the new formula is met with widespread consumer rejection,forcing there-introduction of the original formulation as "Coca-Cola Classic." The cola wartakes "one giant sip for mankind," when a Pepsi "space can" is successfully tested aboard thespace shuttle. By the end of 1985, the New Generation campaign earns more than 58 majoradvertising and film-related awards. Pepsis campaign featuring Lional Richie is the mostremembered in the country, according to consumer preference polls..1987 - Pepsi-Cola President Roger Enrico is named President/CEO of PepsiCo WorldwideBeverages. Pepsi-Cola World Headquarters moves from Purchase to Somers, New York.After a 27 year absence, Pepsi returns to Broadway with the lighting of a spectacular newneon sign in Times Square.1988 - Craig Weatherup is appointed President/CEO of Pepsi-Cola Company.1989 - Pepsi lunges into the next decade by declaring Pepsi lovers "A Generation Ahead."Chris Sinclair is named President of Pepsi-Cola International. Pepsi-Cola introduces anexciting new flavor, Wild Cherry Pepsi.1990 - American Music Award and Grammy winner rap artist Young MC writes andperforms songs exclusively for national radio ads for Pepsi. Ray Charles joins the Pepsifamily by endorsing Diet Pepsi. The slogan is "You Got The Right One Baby."1991 - Craig E. Weather up is named CEO of Pepsi-Cola North America, as Canada becomespart of the companys North American operations. Pepsi introduces the first beverage bottlescontaining recycled polyethylene terephthalate (or PET) into the marketplace. Thedevelopment marks the first time recycled plastic is used in direct contact with food inpackaging.Department of MBA, PESIT, Bangalore Page 18
  19. 19. Pepsi Co India Holding Ltd.1992--Pepsi-Cola launches the "Gotta Have It" theme which supplants the longstanding"Choice of a New Generation."1993 - Brand Pepsi introduces its slogan, "Be Young. Have Fun. Drink Pepsi." Pepsi-Colaprofits surpass $1 billion. Pepsi introduces an innovative 24-can multipack that satisfiesgrowing consumer demand for convenient large-size soft drink packaging. "The Cube" iseasier to carry than the traditional 24-pack and it fits in the refrigerator.1994 - New advertising introducing Diet Pepsis freshness dating initiative features PepsiCEO Craig Weatherup explaining the relationship between freshness and superior taste toconsumers. Pepsi Foods International and Pepsi-Cola International merge, creating thePepsiCo Foods and Beverages Company.1995 - In a new campaign, the company declares "Nothing else is a Pepsi" and takes tophonours in the years national advertising championship.1996 - In February of this year, Pepsi makes history once again, by launching one of themost ambitious entertainment sites on the World Wide Web. Pepsi World eventuallysurpasses all expectations, and becomes one of the most landed and copied, sites in this newmedia, firmly establishing Pepsis presence on the Internet.1997 - In the early part of the year, Pepsi pushes into a new era with the unveiling ofthe Generation Next campaign. Generation Next is about everything that is young and fresh;a celebration of the creative spirit. It is about the kind of attitude that challenges the normwith new ideas, at every step of the way.PepsiCo. announces that, effective October 6th, it will spin off its restaurant division toform Tricon Global Restaurants, Inc. Including Pizza Hut, Taco Bell, & KFC, it will be thelargest restaurant company in the world in units and second-largest in sales.1998 - Pepsi celebrates its 100th anniversary. PepsiCo Chairman and CEO Roger A. Enricodonate his salary to provide scholarships for children of PepsiCo employees. Pepsiintroduces PepsiOne - the first one calorie drink without that diet taste!2000 - Although Pepsi is a great place to work, Steven Truitt (aka struitt) takes his skills andhard work elsewhere (for more money of course!), therefore putting an end to his Pepsi page!Department of MBA, PESIT, Bangalore Page 19
  20. 20. Pepsi Co India Holding Ltd.For more information about Pepsi, choose a search engine and search for Pepsi or visitwww.pepsi.com or www.pepsico.com.2005 - Pepsi invited to introduce new brand cola B. Nature of the business carried PepsiCo is one of the world‟s largest food and beverage companies, with revenues of nearly $60 billion. PepsiCo offers the world‟s largest portfolio of billion-dollar food and beverage brands, including 19 different product lines that each generates more than $1 billion in annual retail sales. Their main business - Frito-Lay, Quaker, Pepsi- Cola, Tropicana and Gatorade – also make hundreds of other nourishing, tasty foods and drinks that bring joy to their consumers in more than 200 countries. PepsiCo‟s people are united by their unique commitment to sustainable growth, called Performance with Purpose. PepsiCo dedicate themselves to offer a broad array of choices for healthy, convenient and fun nourishment, reducing their environmental impact, and fostering a diverse and inclusive workplace culture, PepsiCo balances strong financial returns with giving back to our communities worldwide. C. Vision, Mission & Quality Policy Vision “To build India‟s leading total beverage company, delighting consumers by best meetingtheir everyday beverage needs, and stakeholders, by delivering performance with purpose,through our talented people.” Mission"To be the worlds premier consumer Products Company focussed on convenience food andbeverages. We seek to produce healthy financial rewards to investors as we provideopportunities for growth and enrichment to our employees, our business partners and thecommunities in which we operate. And in everything we do, we strive for honesty, fairnessand integrity." Quality policy“Make sale and deliver the beverage to the consumer as it was designed, in order to deliverpreference”. PepsiCo believes their success depend upon the quality and value of theirproduct by providing a safe, whole some, economically efficient and a healthy environmentfor their customer. And by providing fair returns to their investors while maintaining thestandard of integrity.Department of MBA, PESIT, Bangalore Page 20
  21. 21. Pepsi Co India Holding Ltd. D. Product profile BEVERAGESPepsiCo India‟s expansive portfolio includes iconic refreshment beverages Pepsi, 7UP,Nimbooz, Mirinda, Slice and Mountain Dew; in addition to low calorie options such as DietPepsi, hydrating and nutritional beverages such as Aquafina drinking water, isotonic sportsdrinks - Gatorade, Tropicana 100%, Tropicana Twister fruit juices. FOODSPepsiCos foods division Frito-Lay is the leader in the branded salty snack market and all itsproducts are free of trans-fat. It manufactures Lay‟s Potato Chips; Cheetos extruded snacks,Uncle Chips and traditional snacks under the Kurkure and Lehar brands. Company‟s highfibre breakfast cereal, Quaker Oats and low fat and roasted snack options like Aliva enhancethe healthful choices available to consumers.Department of MBA, PESIT, Bangalore Page 21
  22. 22. Pepsi Co India Holding Ltd. E. Area of operationPepsiCo operates globally. The structure of PepsiCos global operations has shifted multipletimes in its history as a result of international expansion, and as of 2010 it is separated intofour main divisions-PepsiCo Americas Foods, PepsiCo Americas Beverages, PepsiCoEurope, and PepsiCo Asia, Middle East and Africa. As of 2009, 71 percent of thecompany‟s net revenues came from North and South America, 16 percent from Europe and13 percent from Asia, the Middle East and Africa. F. Ownership patternThe whole of the PepsiCo business has been classified in 3 ways around the world. They areas follows:- 1. COBO- Company owned bottling operations. 2. FOBO- Franchise owned bottling operations. 3. JV- joint venture. G. Competitors informationPepsiCo is facing the competition mainly by Coke. It has competition for all its products byCoke.Coca- Cola: It is a carbonated soft drink sold in stores, restaurants in more than 200countries. It is produced by The Coca-Cola Company and is often referred to as simply Cokeor (in European and American countries) as Cola or Pop. Originally intended as a patentmedicine when invented in the late 19th century by John Stith Pemberton, Coca-Cola wasbought out by businessman Asa Griggs Cadler, whose marketing tactics led Coke to itsdominance of the world soft drinks market throughout the 20th century.The Coca-Cola Company produces concentrate, which is then sold to various licensed Coca-Cola bottlers throughout the world. The major Fight between the Pepsi and Coca-Colaproducts is as follows.For, Pepsi ---------- Coca-Cola Slice ---------- Maaza 7-up ---------- Sprite Mirinda ---------- Fanta Nimbooz ---------- LimcaDepartment of MBA, PESIT, Bangalore Page 22
  23. 23. Pepsi Co India Holding Ltd.Pepsi Max ---------- Thumps Up Aquafina ----------- Kinley Water H. Infrastructural FacilitiesPepsiCo India Holding Pvt Ltd is located at Walton Road, Lavelle Road, Bangalore. Itsmanufacturing plant is situated at Kumbalgodu Industrial Area, Bengalore. The reason forPepsiCo‟s success is its specially developed and well equipped infrastructure formanufacturing process and quality assurance procedures. PepsiCo‟s manufacturing processincludes treatment of bottles through sophisticated technology. The plant has separatemachinery for treatment of water used in as an ingredient in the concentrate of PepsiCo. Thebottling plants include a godown for stocking all the raw materials, utility section for thepower generation and maintenance, warehouse for stocking all the raw materials, utilitysection for the power generation and maintenance, warehouse for stocking all the finishedgoods meant for shipping and office space. The company has suitable building for Productionand the Administration. The Production building also has Quality Control Department andthe Administration Building has different departments like Finance, Human Resource andSales. The other basic facilities available include Canteen facilities where tea, snacks andmeals are provided to the employees. PepsiCo has good rest rooms, parking and securityfacilities for its employees. I. Achievement / AwardPepsiCo takes pride in its achievements PepsiCo in India is among 12 American companies selected as finalists for the Secretary of State‟s prestigious 2010 Award for Corporate Excellence. PepsiCo was recognized with a Asia region HR Star Award in 2006. PepsiCo –Exnora waste management programme in Chennai wins Environmental Golden Peacock Award for Innovation in 2006. PepsiCo Palakkad plant won Golden Peacock National Award for a Management in 2001 and 2002. Award for Best HR Strategy in the line with business Pepsico India Holding Pvt. Ltd (Frito Lays Division). Award for Excellence in Training Pepsico India Holding Pvt. Ltd (Frito Lays Division). PepsiCo India has been recognized by ILO in their Annual Report as a model partner for the HIV/AIDS programDepartment of MBA, PESIT, Bangalore Page 23
  24. 24. Pepsi Co India Holding Ltd. J. Work flow model ( Figure 2.1 – Work flow model)Raw Materials Sweetening AgentSyrupPreparationCO2 & ConcentratesCarbonationBottle Washing Filling BottleEffluent treatment plant Bottle Line Quality Assurance Store Raw materialsThis is the first stage where all the raw materials are mixed as required by the products, likein case of Slice – mango pulps, sugar, coloring agents etc. and in case of Pepsi the ingredientslike carbonated water, phosphoric acid, caffeine, citric acid and natural flavors. In this stagethe materials are just taken and inserted into the machine.Department of MBA, PESIT, Bangalore Page 24
  25. 25. Pepsi Co India Holding Ltd. SyrupIn this second stage where the main concentrated syrup is prepared with the sweetening agent(sugar). A syrup kind of mixture is formed which is ready for carbonated process. Theperpetration of the syrup is certainly is certainly one of the most important operation in thebeverage plant, both from the standpoint of sanitation and control of concentration. Theobjective in syrup making is to prepare satisfactory bonded and finished syrup from whichuniform beverages of high quality can be produced. CO2 and carbonationIn this process the prepared syrup will be put for the process known as carbonation. In thiscarbonation process the liquid carbon dioxide is being added to the syrup. Then after thiscarbonation process, concentrate is added to the products. BottlingHere from the other side the bottles come for filing after the process of cleaning which takesplace in the machine named “Tula”. Here the bottles are well cleaned by using the cleansingagent called sodium carbonate.The process of filling fir different products is done by different machines like for 7Up and allkinds of soda filler the dynatorm fill up is used and hang machine for the Slice.Here at a time two lines of bottle filling can be followed. Slice – 7Up 7Up - Leher Peps - Slice etc. Quality assurance processThe process of picking of a sample for every half an hour is followed by quality checkdepartment where the people of this department will be always be taking the samples fromthe beginning of the process(i.e. from the first stage of adding raw materials) to the last stageof bottling. Then the bottles are stored in the store room in crates. A crate consists of 24bottles. At the time of bottle washing, waste water is taken to the effluent treatment plant,where the water is treated with the reverse osmosis process for the purpose of purifying thewater.Department of MBA, PESIT, Bangalore Page 25
  26. 26. Pepsi Co India Holding Ltd. K. Future growth and prospects The Indian soft drinks market has been growing rapidly from 1 billion bottles in 1997 to about 9 billion bottles in 2010. India‟s middle class much larger than China. Furthermore, many observers have predicted that India will eventually become an economic giant, thus growing incomes should support more sales. The growth of the Indian soft drink market is good but retaining market share is an uphill task. To meet the increasing demand for soft drinks in Karnataka enhanced production capacity will be installed. The company is geared up to make all necessary changes as suggested by principal technical and quality team to fall in line with the international brands of Pepsi Cola in the Bangalore plant. PepsiCo has also set its sights on the emerging health-awareness trend. PepsiCo is giving immense importance to the emerging market such as India in its long term growth strategy. In order to give tough competition to Coca- Cola‟s most strongest brand Thumps-up, PepsiCo is going to launch Pepsi Max in this year. Windmill project will be undertaken to overcome the power shortage problems.Department of MBA, PESIT, Bangalore Page 26
  27. 27. Pepsi Co India Holding Ltd.MCKINSEY’S 7S FRAMEWORKFigure 3.1- Mckinsey‟s 7S modelDepartment of MBA, PESIT, Bangalore Page 27
  28. 28. Pepsi Co India Holding Ltd.The McKinsey’s 7s model states that:There are seven basic dimensions, which represent the core of managerial activities. Theseare the “Levels” which the executive use to influence complex and large organizations. Therewas a concerned effort on the part of the originators of the model to coin the managerialvariables with cords beginning with the letter “S” so as to increase the communicator powerof the model.Companies in which these soft elements are present are usually more successful inimplementation of the strategy.Strategy – The direction and scope of the company over the long term.Structure – The basic organization of the company, its department, reporting lines, areas ofexpertise and responsibility (and how they inter-relate).System - Formal and informal procedures that govern everyday activities concerningeverything from managerial information system, through to the systems at the point ofcontact with the customer.Skill - The capabilities and competencies that exist within the company and what it doestowards valued behavior.Shared values – The values and belief of the company which ultimately guide towardsvalued behavior.Staff – the Company‟s people resources and how they are developed, trained and motivated.Style – The leadership approach of top management and the company‟s overall operatingapproach.Department of MBA, PESIT, Bangalore Page 28
  29. 29. Pepsi Co India Holding Ltd. 1. STRUCTURE OF THE ORGANIZATION For the every concern a structure is necessary on which the complete organization should be founded. The existence of a structure as obvious in every organization whether planed/unplanned or ill planed. To have a structure is not a choice of the organizer. The choice is only of the form and pattern of the organization. Planed organization structure may be proved logical clear- cut and streamlined in order to meet the present requirement. The Director look after all the functional department like production, sales, accounts, personnel, purchase etc. Every department sends report directly to the director and are responsible to him in sense of working. In spite of this all department are in direct control of the director. Plant superintendent is the head of the production department. He looks after production, that is bottling process, inspection, storage of new materials and though there is a quality control manager. The controller of accounts heads the accounts department. Manager (Personal & Administration) looks after the function of administration, industrial relation, legal jobs security, welfare etc. Chairman Figure-3.2- Organizational structure Of PepsiCo India Holding Ltd. Managing DirectorLogistic Plant Personal Purchase Marketing Sales FinanceDept. Mgmt. Dept. Dept. Depertment Department Dept.Logistic Production Personal Purchase Marketing Territory FinanceManager Manger Manager Manager Development Development Manager Manager Manger Personal Account Staff Supervisors Supervisor Officer Marketing Area Executive Officer Development Coordinator Staff Staff Staff Accountant Merchandiser Customer Executive Security Lab Store Dept. Pre sales Representative Store Delivery Agent Loader Department of MBA, PESIT, Bangalore Page 29
  30. 30. Pepsi Co India Holding Ltd.The purchase officer is the in charge of all purchase activities of the Purchase-Shippingdepartment. The Manager (Equipment) is responsible for the distribution and maintenance ofvisi-coolers.The company follows narrow span of management. The chain of command starts from toplevel management to middle level management and from middle level management to lowerlevel management. The authority and responsibility differs in each level of managementDEPARTMENTSFrom the organisation structure shown above we can observe that the departmentalization isdone on the basis of standard functions of the management.A. PERSONNEL DEPARTMENTPersonnel management department is responsible for offering service and coordination of thedifferent activities of various departments. It is again headed by the General Manager who isassisted by an office manager. This is also includes an office secretary, a receptionist andhousekeeping assistants. This information flows from the higher superiority to the lowersubordinatesObjectives of Personnel Department:Growth and satisfaction of the employees of the organization.Maintain an organization climate conducive human growth, satisfaction and contribution. Create an environment for team work, and involvement of all personnel for achievingcompany objective.Recruitment It is the process of finding and attracting capable applicants for employment.The process begins when new recruits are sought and ends when their application are submitted.The result is a pool of applicants from which new employees are selected.Purposes for recruitment:- The general purpose of recruitment is to provide a pool ofpotentially qualified job candidates, specifically, the purposes are to: 1. Determine the present and future requirement of the Pepsico India Holding Ltd.in conjunction with its personnel planning and job analysis. 2. Increase the pool of job candidates at minimum cost. 3. Meet the organization‟s legal and social obligation regarding the composition of its workforce. 4. Begin identifying and preparing potential job application who will be appropriate candidates.Department of MBA, PESIT, Bangalore Page 30
  31. 31. Pepsi Co India Holding Ltd. 5. Increased organizational and individual effectiveness in the short term and long term.Recruitment Planning: The first stage in the recruitment process is planning. Planninginvolves the translation of likely job vacancies and information about the nature of these jobsinto a set of objectives or targets that specify the (I) number and (ii) type of applicants to becontacted. In order to reduce costs, organization looks into labour markets most likely to offerthe required job seekers.Generally, Pepsico look in to the national market for managerial and professional employees,regional or local markets for technical employees and local markets for clerical and blue-collaremployees. 1. Internal Recruitment: Internal recruitment seeks application for positions from those who are currently employed. Internal sources include present employees, employee referrals, former employees and former applicants. There is major advantage of internal recruitment. First, it is less costly than external recruiting. Second, organization typically has a better knowledge of the internal candidate‟s skill and abilities than the ones acquired through external recruiting. 2. External Recruitment: External sources far outnumber the internal methods. Specifically, sources external to an organization are professional or trade associations, advertisements, college/ university/institute placement services, walk-ins and write-ins, displaced persons, acquisitions and mergers, and competitors.Generally in Pepsico the most common and least expensive approach for candidates is directapplications, in which job seekers submit unsolicited application letters or resumes. Directapplications can also provide a pool of potential employees to meet future needs.Selection It is the process of picking individuals (out of the pool of job applicants) withrequisite qualifications and competence to fill jobs in the organizations. In Pepsico the mainmedium of selection is Interview method. The applications received from job seekers would besubjected to scrutiny so as to eliminate unqualified applicants. This is usually followed by apreliminary interview the purpose of which is more or less the same as scrutiny of applications,that is, elimination of unqualified applications. Scrutiny enables the HR specialists to eliminateunqualified job seekers based on the information supplied in their application forms. Preliminaryinterview, on the other hand, helps reject misfits for reasons, which did not appear in theapplication forms. Interview has at least three objectives -(i) helps obtain additional informationfrom the applicant; (ii) facilitates giving general information to the applicant such as companypolices, job, products manufactured and the like ; and (iii) helps build the company‟s imageamong the applicant.Performance measurement The main Objective of performance appraisal of PEPSICO isto effect promotions based on competence and performance, to confirm the service ofprobationary employees upon their completing the probationary period satisfactorily. To improveDepartment of MBA, PESIT, Bangalore Page 31
  32. 32. Pepsi Co India Holding Ltd.communication. Performance appraisal provides a format for dialogue between the superior andthe subordinate, and improves understanding of personal goals and concerns. This can also havethe effect of increasing the trust between the rater and ratee. The main method of performanceappraisal of PEPSICO is (i) attendance, (ii) self-expression (written or oral),(iii) ability to workwith other, (iv) leadership, (v) initiative , (vi) technical ability(job knowledge), (vii) ability tounderstand new material, (viii) ability to reason, (ix) originality and resourcefulness, (x) areas ofwork that suits the person best, (xi) judgment, (xii)integrity, (xiii) responsibility and , (xiv)anddefect- indebtness, memo served etc.Industrial Relations:The company has a very cordial atmosphere. It is mainly a people Focus Company thanengineering or technical oriented. It is informal during approach and formal during results.The management and union have joined hands for the achievement of organizationalobjectives.Human Resources Development:It deals with the overall improvement of each individuals, maximum utilization of humanresources selection, placement and training.Amenities and Benefits scheme:The company provides the following amenities and benefits to employees.Incentives:Incentives will be given to the employees on the basis of sales that made a difference fromone sale to another. 0.5% on profit for that sale will be given to the employees.Provident fund:It is a deposit as well as a pension oriented scheme to employees. The employees contributean equivalent amount for the same.Leave with wages:Every worker who has completed 240 working days or more in a calendar year is entitled toget leave with Wages at the rate of one day for each 20 working days.B. SALES DEPARTMENT – ORGANISATION STRUCTURE OF SALES DEPARTMENTTDM (territory development manager)ADC (Area development Coordinator)CE (Customer Executive)PSR (Public Sales representatives)DA (delivery agent)The number of Customer Executives (CEs) and PSRs Public sales representatives (PSRs)upon the size and structure of territory.Function of sales department 1. Sales department is having the rounding system to every outlets in the local markets everyday ( six days in a week ). In case the retailers are finished with the stocks they can contact through phones then the stocks are send to them.Department of MBA, PESIT, Bangalore Page 32
  33. 33. Pepsi Co India Holding Ltd. 2. After collecting the order from the retailers the sales department orders the production department to prepare the required stock to be sent on the mentioned date. 3. Details of the payment procedure, transportation procedure, delivery dates etc are also handled by the sales department. 4. Sales team settles down the deal with the retailers and takes the invoice agreement and then documentation process is carried. 5. The sales department sends the invoice copy to the shipping department which carries the work of transforming the mentioned goods to the vehicle from the stock room and inform back to the sales department with the acknowledgement.The tools used by for fulfilling the various purposes of its sales promotionalactivities are the following:-  Point of sale display  Dealer‟s sales contest  Sales promotion through special event market  Advertising  Incentives  GamesPoint of Sale Display: A sensible man does not have to go far to find out whatever acommon panwala knows that people buy with their eyes. Every item on sale in a shop isdisplayed in front where people can see it at first sight. It is the same with all the shops andvendors in towns either selling consumer or selling soft drinks. Rather in selling a product likePEPSI display is more than help, it is an essential element because soft drink is bought onimpulses on the spur of the movement. Thus the product is tested when it is brought at people‟sattention.Dealer’s sale contest: Another method of sales promotion being used by the PEPSICO,through its distributors is to conduct dealer‟s sales contest during the peak seasons i.e. duringApril to July. In it the dealers are given prize in the form of cases of soft drinks. In the contest atfirst his or her respective distributors according to there categorize each dealer. And then eachdistributor fixes a target of minimum sale for each category to which every dealer according tohis or her category has to achieve during the contest period. The dealers achieving highest salesover and above the target set is giving the awards as under, the order of prizes announced arefirst prize, 2nd prize, and 3rd prize in terms of number of free cases of soft drinks.Department of MBA, PESIT, Bangalore Page 33
  34. 34. Pepsi Co India Holding Ltd.Special event market: The dealers at special event sports place the banners and stall ofPepsi‟s product like picnic fates cricket test match, social events are also used to cater thepeople. It helps in promoting the sale as well as in creating an image product.Sales man contest: Sales man contest are held to motivate the sales man. Sales mancontest are held to motivate the sales man. Under the scheme salesmen are given monetaryincentive on the basis of sale made in their given route.Media planning: A very important part of advertising is to decide the medium ofadvertising and how much to spend in each media:-Newspaper & Magazines, Radio, TV,Hoarding, Product of sales materials (paintings, glow signs, D. Board). Advertising is one ofthe important factors which all put together results sales. It has to be backed by thedistribution network, effective servicing, dealer, goodwill and so on. Thus advertising has tobe very carefully woven with the entire demands of marketing.C. MARKETING DEPARTMENT-This department is responsible for all marketing aspects of retail operation. They are the onewho are mostly into all with the current and prospective customers. This department isheaded by a general manager who is assisted by 2 assistant managers who are in sales. Theyare further assisted by a team of field sales executive.D. SERVICES DEPARTMENTThis department is chained with the responsibility of maintaining service standards. they haveto customer satisfaction and after sales service, a long relationship with the customer. It isagain headed by General Manager, who is further assisted by the manager in charge of salesand services. Here the main objective is to satisfy the customer. In each and every departmentthis service department plays a major role.E. FINANCE DPARTMENT –This department is responsible for preparation of all account aspects of the dealership andretail operations. The Finance Department has the power to take any financial decisions likeallocation of budgets, approval of budget ,etc. It also prepare the budget and submits it to theauditors. This department is under General Manager who is assisted by a finance manager. Accountants, a cashier, and an EDP/Records officer again assist the finance manager.The system followed in the finance department - Raw materials purchased against the demand draft only. 99% of the purchases are in cash & carry system.Department of MBA, PESIT, Bangalore Page 34
  35. 35. Pepsi Co India Holding Ltd. 1% distributors support up to 10 lakhs credit bases. For casual workers salary is paid on the cash basis. For permanent workers salary will be transferred to their bank account.Software used in the finance department - From 2005, company using the profit(+) windows based software for the maintaining the financial records. Before this yearcompany used the profit software for its day to day operation.Training in the finance department - In the finance department , on the jobtraining method is followed for the new employees. Along with the on the job training , thecompany conducts some lecture type of training once in three months.F. PRODUCTION DEPARTMENT -Production department is one of the well knit department of PepsiCo. Production here ishighly reliant on the production planning. The PAC (Product Availability Coordinator) givesthe weekly plan. Logistics, manufacturing and quality control departments discuss the weeklyplan. These are given requisite jobs to be met and fulfilled. The logistics department has toprepare full‟s and empty‟s report on daily basis. The quality assurance department is given aplan for syrup making and like. Production planning is done in two days . Productionplanning is done based on previous data. Based on the empty‟s and full‟s received,production for the day is decided. The following departments manufacturing, logistics,quality control , finance and purchase do production planning . Set strategies have to befollowed and specifications have to be adhered.PRODUCTION PLANNING : 1. Distributor gives the demands to TDM‟s along with the cheques. TDM‟s will consolidate the demand keeping in mind . I. Cheque and II. Returnable Glass (in case of glass bottle) 2. Demand for different territories is consolidated and given to PAC (Product Availability Coordinator or managers). 3. PAC/PAM will check: i. Glass in plant. ii. Available stock. iii. Production staff. iv. Commit stock according to the present situation in plant v. Ascertain how many glass bottles he will get back.Department of MBA, PESIT, Bangalore Page 35
  36. 36. Pepsi Co India Holding Ltd.FORECASTING:Forecasting is done using various tools such as: Seasonality Promotions Discounts Market activityThis forecast becomes a basis for the production planning.G. PURCHASE DEPARTMENTStores and purchase is a department, which are system driven. This department is bound tohoard the requisite raw materials, packaging materials and consumables. The raw materialsinclude caps, crown boxes and bottles. The packaging materials include labels and cartons.The consumables that go into product include water treatment chemicals, syrup chemicalsand maintenance spares.The entire stores and purchase departments based on SAP (System Application Protocol).The Product Availability Coordinator (PAC) based on the inventory and bill defined in thesystem undertakes Material Resource Planning (MRP). The system throws the netrequirement and purchase acquisition is made. The purchase order is noted on three factors: Value of item purchased. Value of item consumed. Customer demand forecast.The system controls the inventory and enumerates when the item should be purchased basedon the lead time.This department is responsible for procuring the materials at the right time, right quantity forthe smooth functioning of the production using various methods. This method is alsoresponsible and controls the maintenance of materials, which it receives from suppliers.Various means of transport are used for bringing the materials of the production process atprompt delivery schedule.FUNCTIONS OF PURCHASE MANAGER - 1. His main function is to ensure availability of resources. 2. He plans what are the materials to be purchased . 3. He is concerned with vendor management and development. 4. He does the procurement of materials .Department of MBA, PESIT, Bangalore Page 36
  37. 37. Pepsi Co India Holding Ltd. 5. He also does inventory management.PURCHASE PROCEDURE – The company purchases materials on annual contractbasis. The company receives two weeks inventory in advance from the supplier. Supplier willbe aware of what is the requirement of the company for the next 3 months.SHIPPING DEPARTMENT - It consists of a Manager. Executives and Labourers.Their main functions are to ship and deliver the finished products in the various destinations.MAINTENANCE DEPARTMENT – Maintenance Department is small departmentwhich is primarily concerned with cleaning and maintaining the plant premises. It is basicallyconsists of unskilled workers whose job is to clean the plant on a regular basis and maintainthe lawns around the plant.2. STRATEGYStrategy is the choice of direction and the action the company adopts to achieve its objectivesin a competitive situation.A strategy explains what are the objectives of the organisation and how the organisation goabout to achieve its objectives. A. Ensure Sustainable, Profitable Growth in Beverages -The merger with PepsiCo‟s anchor bottlers creates a lean, agile organization in India with anoptimized supply chain, a flexible go-to-market system and enhanced innovationcapabilities. When combined with the actions they are taking to refresh their brands acrossthe entire beverage category, PepsiCo believe this game-changing transaction will enablethem to accelerate their top-line growth and also improve profitability. PepsiCo continue tosee significant areas of global beverage growth, particularly in developing markets and inevolving categories. They will invest in those attractive opportunities, concentrating ingeographies and categories in which they are the leader or a close second, or where thecompetitive game remains wide open. Additionally, PepsiCo will use their R&D capabilitiesto develop low- and zero-calorie beverages that taste great and add positive nutrition such asfiber, vitamins and calcium. B. Unleash the Power of "Power of One."-PepsiCo is in the unique position to leverage two extraordinary consumer categories that havespecial relevance to retailers across the globe. Their snacks and beverages are both high-velocity categories; both generate retail traffic; both are very profitable; and both deliverexceptional cash flow. The combination of snacks and beverages–with their high-demandglobal and local brands–makes PepsiCo an essential partner for large-format as well as small-Department of MBA, PESIT, Bangalore Page 37
  38. 38. Pepsi Co India Holding Ltd.format retailers. PepsiCo will increasingly use this portfolio and the high coincidence ofconsumption of these products through integrated offerings (products, marketing andmerchandising) to create value for consumers and deliver greater top-line growth for retailers.PepsiCo also will be accelerating Power of One supply chain and back-office synergies inmany regions to improve profitability and enhance customer service. C. Rapidly Expand Our "Good-for-You" Portfolio - PepsiCo currently has a roughly $10 billion core of "Good-for-You" products anchored by:Tropicana and our other juice brands; Aquafina; Quaker Oats; Gatorade (for athletes); andlocal "Good-for-You" products and brands. PepsiCo will build on this core with an increasingstream of science-based innovation derived from the R&D capabilities that we have beenramping up over the past couple of years, as well as from targeted acquisitions and jointventures. They will be investing to accelerate the growth of these platforms, and will use theknowledge from these initiatives to improve our core snack and beverage offerings and alsoto develop highly nutritious products for undernourished people across the country. D. Continue to Deliver on Environmental Sustainability Goals and Commitments - PepsiCo are committed to protecting the Earths natural resources and are well on their wayto meeting their public goals for meaningful reductions in water, electricity and fuel usage.Their businesses around the country are implementing innovative approaches to besignificantly more efficient in the use of land, energy, water and packaging–and are activelyworking with the communities in which PepsiCo operate to be responsive to their resourceneeds. In 2009, PepsiCo formalized our commitment to water as a human right, and willfocus not only on world-class efficiency in their operations, but also on preserving waterresources and enabling access to safe water. PepsiCo‟s climate change focus is on reducingour carbon footprint, including a reduction in absolute greenhouse gas emissions throughcontinued improvement in energy efficiency and the use of alternative energy sources. PepsiCo actively work with their farmers to promote sustainable agriculture–and aredeveloping new packaging alternatives in both snacks and beverages to reduce our impact onthe environment. E. Cherish PepsiCo Associates and Develop the Leadership to Sustain Growth - PepsiCo have an extraordinary talent base across their global organization–in theirmanufacturing facilities, sales and distribution organizations, marketing groups, stafffunctions and with their general managers. As PepsiCo expand their businesses, they areplacing heightened focus on ensuring that they maintain an inclusive environment and ondeveloping the careers of their associates–all with the goal of continuing to have theleadership talent, capabilities and experience necessary to grow our businesses well into thefuture. As an example, PepsiCo are implementing tailored training programs to providemanagers and senior executives with the strategic and leadership capabilities required in arapidly changing environment.Department of MBA, PESIT, Bangalore Page 38
  39. 39. Pepsi Co India Holding Ltd. F. DISTRIBUTION STRATEGY -PEPSI has very strong distribution system spread across the country. They have 4 plantsunder COBO (Company Owned Bottling Operation) in places like Bangalore (Karnataka),Chennai (TN),Pallakad (KERALA),Hydrabad (AP ) only to cater the need and supply ofSouth India. G. PROMOTION STRATEGY –Some of the top celebrities from the field of music and sports are used for promotions. PEPSIoffers discounts, commissions, online games, gifts, coupons, campaign on social networkingsites like facebook from time to time to push their product over competitor‟s product. A salesDay is arranged once in a year which is called –CHALO BAZAR DAY where people fromacross all functions in the organization go on a route ride and sell.3. SYSTEMSystem refers to the formal process and procedure used to manage the organization, includingthe management control systems, performance measurement management system and recordsystem , performance measurement and reward system, planning ,budgeting, resourceallocation system, information system and distribution systems. a. Sales forecasting system In Pepsico there are 3-trritory development managers; having various areas will forecast their area sales depending upon the previous year‟s sales. b. Order receiving system In order receiving system the customer executives will take a major part, they will go to each distributor in various areas and take the order from the distributor. The collected orders will shown to the area development coordinator. The area development coordinators take that the crates will sent back to the plant. c. Order execution system When territory development manager receives order from different territory it will send to the production department. The stock that is there in production department will be loaded to the truck and order executed to the distributor of different areas. d. Distribution system There are two principle means to distribute the product from the production plant or warehouse to the market place. In Pepsi cola marketing Ltd distribution takes place through two types of channels. In Bangalore-city the type of channel is one level or direct distribution system.Department of MBA, PESIT, Bangalore Page 39
  40. 40. Pepsi Co India Holding Ltd. Fig- 3.3 – Distribution system f PepsiCo PepsiCo’s Plant Indenting Primary Distributor Sale Secondary Sale Market / Retailers Consumer4. STYLE / CULTUREStyle refers to the flow of orders or method of communication in the organization PepsiCo isfollowing participative style where in subordinates and their heads will have discussion andthen they will take decision. Here in PepsiCo all middle level management employee makediscussion with their heads and make decision.Organizational culture The dominant values and beliefs, and norms develop overtime and become relatively enduring features of organizational life. Although branches of Pepsi Company has been situated in different places in world. But company is following the same type of management practices, management concept and principle and management theories.Management style Pepsi Company has focused on the best management style for promoting the sale of products.Department of MBA, PESIT, Bangalore Page 40
  41. 41. Pepsi Co India Holding Ltd. For example: Pepsi company has adopted “Walk The Talk” style of management, where it will display new products to the general public and if accepted than they will adopt the same style. Democratic style is applied by the company‟s management for suggestions from subordinates in the organization. Even managers go along with the sales persons on the field work to catch the customers. All are closely like a family in the organization.Leadership styleThe Leadership style of managers of PepsiCo is of Consultative or Participative orDemocratic in nature.The chief characteristics of this type of leadership are as follows:1. The leader delegates as much responsibility to the members of the work team as theirexperience and knowledge will permit.2. He places emphasis on results rather than on action.3. He shows concern for his employees and thereby gains their respect.4. He encourages co-operation when it will lead to greater productivity and creativity.5. He defines the objectives for the group and gives its members some freedom forperformance within the standards laid down by him.Example - The team leader under whom I was doing my internship once assigned me theresponsibility to collect the id number printed on the cooler provided by the PepsiCo to theretailers and the address proof of the retailers in the Kormangala area because many coolersare gone missing in that area, he has made it clear that I have to collect all this informationwithin one day , but at the same time he was so co-operative that he has a assigned a salesexecutive with me so that, that person can guide me while collecting these information. Atthe same time he explained me what is the reason or main objective behind collecting theseinformation. I think this is one of the best examples of leadership style in PepsiCo.Decision flowIn PepsiCo decision flow is top down. In which decision flows from the higher authority tolower level. As the higher authority has a control over the decision will make the decisionswhich will influence the function has to be followed an executed, administered and handledby assistants.5. SKILL A skill refers to how smart an employee does his work with available sources. In marketing and sales department various steps are taken for staff to develop appropriate new skill for marketing their products.Department of MBA, PESIT, Bangalore Page 41
  42. 42. Pepsi Co India Holding Ltd. a. Multi disciplinary skillsProduction department some persons have the skill to operate bottle washing machine,sealing machine and even some time they also handle small problems in machines. Theythemselves identify the problem area of machine and make it repaired if required. b. Single skill Single skill refers to the only one skill with people. In PepsiCo only HR people and chemist have single skill.Skill classification in PepsiCoIn PepsiCo skill is mainly classified in marketing & sales department and engineering skillsin production department. in marketing department extra benefit will be given to the personwho achieve sales target. Every person in marketing department will be having respectivesales target.Once in a year various steps are taken to impart various skills such a listening skill,presentation skills to the customer executives.6. STAFFStaffs refer to the company human resources, which includes the manpower available in theentire organization.The company has divided its human resource into: A. Technical staff Company classifies employees working in production departmentwhere many activities related to technical are done. Such as filling and making of pet bottlesection. B. Non – Technical staff Company also has non – technical staff in securitydepartment, dispatch section and sales department (delivery agents and loaders). C. Administrative staff PepsiCo also have the staff to administrate the company.Every department has the departmental head, which makes the decision in the company afterhaving discussion with the subordinates. The company is recruiting skilled employees, in production section they are recruiting well experienced and technically skilled persons, in marketing section they areDepartment of MBA, PESIT, Bangalore Page 42
  43. 43. Pepsi Co India Holding Ltd. selecting only the M.B.A. graduates, apart from this their selection in middle level is totally different, theyrecruit the IIM‟S Candidates. The remunerations for the employees will be Rs.8000 to Rs. 10000; this is the starting range it varies according to the posts. The rewards & awards are based on the performance appraisal and are held once in a sixmonth. The compensation depends on the number of boxes sold by the employees.7. SHARED VALUESShared values are the commonly held beliefs, mindsets and assumptions that shape how anOrganization behaves. An organization‟s main values are stated in its vision and missionstatements.So, it is the responsibility of every employees of the organization to share these values, sothat every employee of the organization can give their best for the achievement of thosevalues.PepsiCo‟s values reflect its aspirations – the kind of company PepsiCo want to be. PepsiCoexpress its values in the form of its commitment. Pepsico’s Commitment PepsiCo‟s commitment is to deliver sustained growth, through empowered people, acting with responsibility and building trust. Here‟s what this means: Sustained Growth is fundamental to motivating and measuring PepsiCo‟s success. PepsiCo quest for sustained growth stimulates innovation, places a value on results, and helps them to understand whether today‟s actions will contribute to their future. It is about growth of people and company performance. It prioritizes making a difference and getting things done. Empowered People means PepsiCo have the freedom to act and think in ways that they feel will get the job done, while being consistent with the processes that ensure proper governance and being mindful of the rest of the company‟s needs. Responsibility and Trust form the foundation for healthy growth. It‟s about earning the confidence that other people place in PepsiCo as individuals and as a company. PepsiCo‟s responsibility means they take personal and corporate ownership for all they do, to be good stewards of the resources entrusted to them. PepsiCo build trust between themselves and others by walking the talk and being committed to succeeding together.Department of MBA, PESIT, Bangalore Page 43
  44. 44. Pepsi Co India Holding Ltd.Guiding Principles:- This is how they carry out their commitment. PepsiCo must always strive to:- Care for customers, consumers and the world they live in. PepsiCo driven by an intense, competitive spirit in the marketplace, but they direct this spirit toward solutions that achieve a win for each of their constituents as well as a win for the corporation. Their success depends on a thorough understanding of their customers, consumers and communities. Caring means going the extra mile. Essentially, this is a spirit of growing rather than taking. Sell only products PepsiCO can be proud of The test of their standards is that they must be able to personally endorse their products without reservation and consume them themselves. This principle extends to every part of the business, from the purchasing of ingredients to the point where PepsiCo products reach the consumer‟s hands. Speak with truth and candor PepsiCo speak up, telling the whole picture, not just what is convenient to achieving individual goals. In addition to being clear, honest and accurate, PepsiCo take responsibility to ensure their communications are understood. Balance short term and long term PepsiCo make decisions that hold both short-term and long-term risks and benefits in balance over time. Without this balance, they cannot achieve the goal of sustainable growth. Win with diversity and inclusion PepsiCo leverage a work environment that embraces people with diverse backgrounds, traits and different ways of thinking. This leads to innovation, the ability to identify new market opportunities, all of which helps develop new products and drives our ability to sustain their commitments to growth through empowered people. Respect others and succeed together This company is built on individual excellence and personal accountability, but no one can achieve their goals by acting alone. PepsiCo need great people who also have the capability of working together, whether in structured teams or informal collaboration. Mutual success is absolutely dependent on treating everyone who touches the business with respect, inside and outside the company. A spirit of fun, their respect for others andDepartment of MBA, PESIT, Bangalore Page 44
  45. 45. Pepsi Co India Holding Ltd. the value PepsiCo put on teamwork make us a company people enjoy being part of, and this enables us to deliver world-class performance. Example - In order to maintain a sustained growth PepsiCo always nurture the existing talent in the organization through various training programme and performance appraisal. While doing my project I have observed that PepsiCo had arranged various training programme for different level of employee to make them proficient in various technical and management skills. In January 2011 they have implemented the “SAMNA” system in their company. That time they have made it compulsory that all the sales people should be able to operate the SAMNA device properly in order to take order from the retailer and to place the order to the manufacturing plant and to the distributor, that time the company people though I was doing my project they made me to attend the training programme so that I can also learn how to operate the system and treated me equally as an employee.Department of MBA, PESIT, Bangalore Page 45
  46. 46. Pepsi Co India Holding Ltd. SWOT ANALYSIS PepsiCo is an American multinational corporation. The company is headquartered in Purchase, York. PepsiCo was founded in 1965 through the merger of Pepsi-Cola and Frito- Lay. Popular brands of PepsiCo are: Mountain Dew, Diet Pepsi, Lay‟s, Doritos, Tropicana, Gatorade, and Quaker. Pepsi‟s products are available in some 200 countries. In 2010 the company acquired its two largest bottlers, Pepsi Bottling Group and PepsiAmericas. SWOT analysis of the company is given below: Strengths1. Pepsi is highly diversified company by having non-carbonated and carbonated beverages in addition to sweet, salty and cereal-based snacks.2. Pepsi Corporation has strong image all over the globe and possesses 5 diverse billion-dollar brands.3. PepsiCo has shaped partnerships with numerous brands in order to market and distribute them with its own brands.4. PepsiCo brands stand for quality and are appreciated household names.5. Pepsi has more diversified portfolio in food and beverage related products as compared to the Coca Cola.6. PepsiCo mainly fights on differentiation, advertising and high market share.7. PepsiCo has strong brand equity and greater number of loyal customer‟s around the world.8. It has huge production and distribution facilities of beverages and food products.9. PepsiCo has delivered solid operating and financial performance in current (2007-2009) challenging global environment and generated significant operating cash flow such as: a. Net sales grew 5% on a stable currency basis. b. Main division operating profit rose 6% on a stable currency basis. c. Operating cash flow, without few items, arrive at $5.6 billion, an increase of 16%. Weaknesses1. In 1993, PepsiCo had vast lines of discontinued products throughout the history which badly damage the company‟s reputation..2. PepsiCo directed to stave off a runaway fraud pertaining to supposed product tampering such as: a. Needles were declared to have been found in bottles and cans of Diet Pepsi. b. Consumers accounted finding pins, screws and a bullet in their Diet Pepsi. Department of MBA, PESIT, Bangalore Page 46
  47. 47. Pepsi Co India Holding Ltd.3. Overdependence on the markets of United States and Wal-Mart. For example the company generates 52 percent of its sales from the U.S. and nearly 12 percent is generated by Wal- Mart.4. PepsiCo is too away Coca-cola in the international market place and demand for its products is extremely elastic. Opportunities1. India is a promising market and one of the top five market places in provisions of growth of soft drinks market.2. The level of consumption in India is seen to increase with increasing household incomes.3. Expand divisions with mergers and acquisitions for strong presence all over the world.4. Invest in R&D to expand offerings of more reasonable, nutritionally related products for lower-income and underserved communities.5. The improving economic conditions globally after economic slowdown 2007-10.6. Growing demand of juices products and health-conscious consumers and changing lifestyles.7. Bottled water drinking is increased by 11 percent.8. PepsiCo should offer the hygienic products due to increasing figure of health conscious consumers. Threats1. PepsiCo and Coke have been main targets in India because they are familiar foreign firms. This draws abundance of attention and strong criticism by different groups.2. Improve or sustain brand equity figure for PepsiCo‟s $19 billion brands in top 10 marketplaces.3. In this Industry Pepsi is fighting against increasing taxes on soft drinks.4. Carbonated drink consumption have been decreasing due to involvement of lofty fructose and sugar to obesity result to heart disease.5. Many smaller players are furious competitors which are also creating the competition harsh.6. Economic slowdown resulted in volatile commodity costs, fluctuating currencies, frozen credit markets and negative GDP rates.7. PepsiCo is facing strong regulations in different countries around the world.8. Coca-Cola is the strong competitor which competes with strong advertising and differentiation.9. Numerous substitutes such as water, juices, coffee and beer etc are available to the end consumers. Department of MBA, PESIT, Bangalore Page 47
  48. 48. Pepsi Co India Holding Ltd.ANALYSIS OF FINANCIAL STATEMENTTable 5.1 Ratio AnalysisS.NO RATIO TO BE FORMULAE YEAR AMOUNT ANS CALCULATED1 Current ratio Current assets 2010 12571000 Current liabilities 8756000 1.47 2009 10806000 8787000 1.22 2008 10151000 7753000 1.302 Gross profit ratio Gross profit 2010 23133000 Net sales 43232000 0.54 2009 22900000 43251000 0.53 2008 21436000 39474000 0.543 Net profit ratio Net profit after tax 2010 5946000 43232000 0.14 Net sales 2009 5142000 43251000 0.12 2008 5658000 39474000 0.144 Proprietary ratio Shareholder’s fund 2010 16908000 0.42 Total assets 39848000 2009 12203000 0.34 35994000 2008 17234000 0.49 34628000Department of MBA, PESIT, Bangalore Page 48
  49. 49. Pepsi Co India Holding Ltd.5 Overall profitability Sales 43232000 ratio 2010 1.08 Total asset 39848000 43251000 2009 1.20 35994000 2008 39474000 1.14 34628000INTERPRETATION OF RATIO ANALYSIS 1. The general rule of thumb for the current ratio is 2:1. The current assets are more than current liability but it is not satisfactory. 2. The same consistency in gross profit ratio of 54%indicates that the firm is making higher profits. Its operations are running effectively. 3. The net profit ratio of 14% in FY2010 indicates the firm‟s standard performance of the business compared to previous two years. 4. The proprietary ratio indicates the extent to which tangible assets are financed by owner‟s fund. The ratio will be 100% when there is no borrowing for purchasing of assets. The increasing and decreasing trends in the ratio of PepsiCo from 2008 to 2010 indicates relatively unsecured position in the event of the concern. 5. The overall profitability ratio of 2 and above in the recent years indicates that the company is efficient in its operations. But the company has less than 2 overall profitability ratio.Department of MBA, PESIT, Bangalore Page 49