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Coca cola sales and distribution

The project describes the sales and distribution network adopted by coca cola beverages in india. It mentions the problems which are faced by the company.

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Coca cola sales and distribution

  1. 1. VV Sales and Distribution Team Members: Ayush Manan 13DM049 Surinder singh 13DM197 Sumit Rekhi 13DM195 Tushar Mittal 13DM205 Udit Jain 13DM206
  3. 3. 3 | P a g e COMPANY OVERVIEW The Coca-Cola Company re-entered India through its wholly owned subsidiary, Coca-Cola India Private Limited and re-launched Coca-Cola in 1993 after the opening up of the Indian economy to foreign investments in 1991. Since then its operations have grown rapidly through a model that supports bottling operations, both company owned as well as locally owned and includes over 7,000 Indian distributors and more than 2.2 million retailers. Today, their brands are the leading brands in most beverage segments. The Coca- Cola Company's brands in India include Coca-Cola, Fanta Orange, Limca, Sprite, Thums Up, Burn, Kinley, Maaza, Minute Maid Pulpy Orange, Minute Maid Nimbu Fresh and the Georgia Gold range of teas and coffees and Vitingo (a beverage fortified with micro-nutrients). In India, the Coca-Cola system comprises of a wholly owned subsidiary of The Coca- Cola Company namely Coca-Cola India Pvt Ltd which manufactures and sells concentrate and beverage bases and powdered beverage mixes, a Company-owned bottling entity, namely, Hindustan Coca-Cola Beverages Pvt Ltd; thirteen licensed bottling partners of The Coca-Cola Company, who are authorized to prepare, package, sell and distribute beverages under certain specified trademarks of The Coca-Cola Company; and an extensive distribution system comprising of our customers, distributors and retailers. Coca-Cola India Private Limited sells concentrate and beverage bases to authorized bottlers who are authorized to use these to produce our portfolio of beverages. These authorized bottlers independently develop local markets and distribute beverages to grocers, small retailers, supermarkets, restaurants and numerous other businesses. In turn, these customers make our beverages available to consumers across India. A National Council of Applied Economic Research (NCAER) study on the carbonated soft-drink industry indicates that this industry has an output multiplier effect of 2.1. This means that if one unit of output of beverage is increased, the direct and indirect effect on the economy will be twice of that. In terms of employment, the NCAER study notes that "an extra production of 1000 cases generates an extra employment of 410 man days." As a Company, our products are an integral part of the micro economy particularly in small towns and villages, contributing to creation of jobs and growth in GDP. Coca- Cola in India is amongst the largest domestic buyers of certain agricultural products. As an industry which has strong backward and forward linkages, our operations catalysis growth in demand for products like glass, plastic, refrigeration,
  4. 4. 4 | P a g e transportation, and Industrial and agricultural products. Their operations also lead to incremental growth for enterprises engaged in post-production activities like merchandising, marketing and sales. In addition, they share best practices and technological advancements with our suppliers, vendors and allied industries which often lead to improvement in the overall standards of quality across industries. COBO: Company owned bottling operations FOBO: Franchisee owned bottling operations PRODUCT PORTFOLIO 1. CARBONATED BEVERAGES A. COCA COLA
  6. 6. 6 | P a g e B. KINLEY C. MINUTE MAID PULPY ORANGE D. GEORGIA MARKET CLASSIFICATION Market Classification Geographical Area Competition
  7. 7. 7 | P a g e Geographical - Internationally Coke segments its product  Country & region wise  Variations as per tastes & income Competition-Presence of players such as:  Pepsi  Parle  Dabur ORGANIZATION STRUCTURE
  8. 8. 8 | P a g e SALES ORGANIZATION STRUCTURE RECRUITMENT AND SELECTION  Coca-Cola recruitment process is well established, they give ads in newspaper, company’s website, institutions,etc.  Coca-Cola recruits MT’s from premier B schools.  They mostly offer PPO’s to the Summer Interns. SELECTION PROCESS INVOLVES: i. Group Exercise ii. Interview iii. Presentations iv. Psychometric tests v. Situational Exercises AGM Sales Manager Area Sales Manager Sales Executives Market Development Executive / Pre- sellers
  9. 9. 9 | P a g e TRAINING  Coca-Cola India partners with Indian School of Business (ISB) to launch the Coca-Cola – ISB Retail Academy  The ‘Parivartan’ program - Training small town retailers. Coke’s new strategy involves training retailers (around 6,000 of them) in a program launched by the Coca-Cola University PERFORMANCE RATINGS  Exceptional performance (EP)-Contributions significantly exceed the stated objectives in terms of quality, quantity and timeliness  Successful performance (SP)– Contributions meet and sometimes exceed the objectives, which are based on challenging goals  Developing performance (DP)-Contributions meet some / most but not all of the objectives and performance improvement is necessary  No Performance (NP)-Contributions frequently do not meet the stated objectives. SALES FORCE MOTIVATION  Incentives based on quarterly performance  No. of units and/or total revenue, work as a base for incentives  Every executive needs to add new outlets every year to get UNIT incentives  Target achievers are recognized by giving: A. TV, Fridge, etc. B. Certificates / trophies C. Lunch / outing with senior management, etc.  Foreign trips for managerial level & above
  10. 10. 10 | P a g e REWARDS AT COCA COLA FORECASTING  Combination of top down and bottom up approach  Forecasts based on factors such as: A. Historical data B. Economic parameters C. Seasonal variation D. Festivals, ceremonies, etc. E. Weekly reviews to adjust monthly forecasts  Forecasts are region-wise, they are further broken down into cities, towns and villages by sales managers. •Employee salary increment •Grade Jump, Designation change •Annual incentive Plan (AIP) (for business performance, but fixed) •Personal Progress report (PPR) (Annual Appraisal) Yearly Basis •Making the move (MTM, sales target achieve) •Monthly turn hall (extraordinary performance) Monthly Basis •Employee of the Quarter (EOQ, non sales) •Sales Dangle context •Gold Context Quarterly Basis
  11. 11. 11 | P a g e DISTRIBUTION DISTRIBUTION ROUTE  Key Accounts -The customers in this category collectively contribute a large chunk of the total sales of the Company. It basically consists of organizations that buy large quantities of a product in one single transaction. The Company provides goods to these customers on credit, payments being made by them after a certain period of time i.e. either a month of half a month. Examples: Clubs, fine dine restaurants, hotels, Corporate houses etc.  Future Consumption -This route consists of outlets of Coca-Cola products, wherein a considerable amount of stock is kept in order to use for future consumption. The stock does not exhaust within a day or two, instead as and when required stocks are stacked up by them so as to avoid shortage or non-availability of the product.Examples: Departmental stores, Super markets etc.  Immediate Consumption-The outlets in this route are those which require stocks on a daily basis. The stocks of products in these outlets are not stored for future use instead, are exhausted on the same day and might run a little into the next day i.e. the products are consumed at a fast pace. Examples: Small sized bars and restaurants, educational institutions etc.  General-Under this route, all the outlets that come in a particular area or an area along with its neighboring areas are catered to. The consumption period is not taken into consideration in this particular route. It Focus on high traffic locations-Railway stations, Bus stand.Coke India distributes using 2 routes  Direct Route  Indirect Route Plant Warehouse Direct Route Market Indirect Route Distributor Market
  12. 12. 12 | P a g e  3 COBO Regions – 27 COBO units  1 FOBO Region – 12 FOBO units DISTRIBUTION STRUCTURE  Direct Route: Direct On Order & Ready Stock
  13. 13. 13 | P a g e  Indirect Route: Distributors cover: 500-600 outlets DELHI-NCR DISTRIBUTION Distribution of Coca-Cola includes full Coverage of Delhi-NCR with 59 Routes spread across region. The Retailer is Handling 45 Pre sellers. Company owned & contracted vehicles for efficient distribution. The vehicles owned by company are 56 particularly for this region only. Each of the transporting vans of company has one driver and two loaders to efficiently load and unload goods.
  14. 14. 14 | P a g e DISTRIBUTORS FUNCTIONS Bulk Breaking Depends upon location Warehousing Storage & safety Transportation Distributor to retailer Market Information Sourcing Customer Intelligence Competitor Intelligence Consumer tastes & preferences Maintaining a) Visual Merchandising b) Banners, posters, etc. a) Signage b) Interior ambience c) Overall environment Problems faced by distributor • From company : discounts/incentives given at the end of the month • From retailer : bad debts/run away
  15. 15. 15 | P a g e LOGISTICS 1) Average order size a) Distributor to company b) Retailer to Distributer Based on Demand, Season 2) Order placement a) Distributor to company b) Retailer to distributer Phone Distributor Representative 3) Transit Time 2 Days 4) Order frequency Daily 5) Inventory Maintained 1 day 6) Unsold/Damaged Merchandise Replaced 7) Technology a) A/C Keeping b) Stock keeping c) Complaint Handling 8) Mode of Transportation (company to distributor) Company vehicle 9) Transportation Expenses a) Company to Distributor b) Distributor to retailer Company Distributor 10)Warehousing a) Storage Capacity b) Ownership Minimum 30 m2 Owned / Rented 11) Stock keeping responsibility Stock keeper
  16. 16. 16 | P a g e FLOW OF THE PRODUCT PERFORMANCE MANAGEMENT  RED Strategy – Right Execution Daily  Tool to measure the performance of the distributor in the outlet by setting some standard or parameter of execution.  RED   Check Visi-Cooler Management  Availability of the product in the outlet  Check the activation in the outlet Market Developer checks 25 outlets a day and report to HCCBL on the score of 100 •Pre-seller goes on his route and books the orders 9am- 6pm •Order is registered on the server through GPRS on the spot 9am-6pm •Order is processed •Load sheet is released 6pm-11pm • Loading the vehicles is done by the C&F people 11pm-6am •First vehicles leaves at 6am •All vehicles leave by 9.30am 6am-9.30am •Product delivery •Empty bottles are collected 9.30am- 8.30pm •Trucks return to depot •Unloading takes place 8.30pm- 11pm •Records are tallied •Cash submission 11pm
  17. 17. 17 | P a g e MARGINS  A margin per crate (comprising 24 bottles of 300 ml each) is Rs 20.  On the 200 ml pack size, margin is Rs 16 per crate.  Sales of the more affordable 200 ml pack size account for about 60 per cent of its total carbonated soft drink (CSD) sales.  Non-CSD business accounts for 15 per cent.  Outsourced distribution so that trucks and other equipment needed for the purpose are no longer owned by the company. FINANCIALS Profit Margin a) To distributors b) To retailers 1-1.5% 2-3% Advance payment a) to company b) for refrigerators 1,00,000 5,000 Credit terms and policies i) Credit amount a)Company to distributor b)Distributor to retailer N/A Can provide. ii) Credit period One month(for retailers)
  18. 18. 18 | P a g e LEARNINGS  The real time order processing system through use of technology helps reduce the lead time  24hrs working i.e. the loading cases in the night saves valuable time RECOMMENDATIONS  Pre-sellers shouldn’t be looked at as an extra cost. On the contrary, since their inception sales have risen  Order devices at Diamond outlets can facilitate quicker order placement.
  19. 19. 19 | P a g e REFERENCES   