Project Report

On

CRYSTALLIZATION ON NSI

2011-2012
Submitted By:Jyoti Pal Roll No. 1055450023

Naraina Vidya Peeth Management Institute Panki, Kanpur-208020

Naraina Vidya Peeth Management Institute Gangaganj,Panki, Kanpur-208020

DATE. . . . . . .

To Whom It may Concern

This is to certify that Mr./M Krishna Kumar Tripathi student of M.B.A Course (2008-10) at Naraina Vidya Peeth Management Institute with dual Specialization in Marketing & Finance has satisfactorily completed the summer research project on STUDY OF MARKET ANALYSIS AND STRATEGIC OF PEPSICO AT
GORAKHPUR

study is done under the guidance of the undersigned by partil fulfillment for the award of M.B.A .I wish him /her all the best for bright future ahead.

Suervisor

Head of Department

Director

ACKNOWLEDGEMENTS
The training will be incomplete without acknowledge giving my sincere, gratitude to all persons who have helped me in the preparation of this dissertation. First of all, I thank GOD ALIMIGHTY for the blessings showered on me throughout this project work, which has helped me in the successful completion of the training. I feel privileged in expressing profound sense of gratitude and in debtness of Mr. PRAKASH CHANDRA who gave me, excellent opportunity to work with Pepsi family .I feel thankful to PRAKASH CHANDRA (Asst. manager) Pepsi. Pvt Ltd who gave me my project title in guided me to complete my project her valuable guidance constant encouragement and inspiration were instrumental in the complexion of this report. He always allowed me to encroach upon his precious time and showed his generosity ideas. KRISHNA KUMAR TRIPATHI M.B.A. 2 year NARAINA VIDYA PEETH
KANPUR

CONTENTS
Page No.

Preface Acknowledgement Certificate from organization Certificate from institute Introduction company Objective of study Research methodology Analysis Limitation Findings Conclusion Recommendation

6-10 11-12

13-18 19-59 60-61 62-68 69-74 75-76 77-79 80-81 82-85

PREFACE

Preface
This study titled as above aims at exploring the strategies followed by PepsiCo India to manage its various partners both internal as well as external since it started its operations in India. This study will also explore what changes PepsiCo India is bringing in order to increase its visibility and market presence to tackle the ever increasing hold of Coca Cola on the Indian beverage market. This study aims to explore the overall functioning and position of PepsiCo India in the marketplace. It also aims to know customer perception regarding PepsiCo India. To know about these facts this report will primarily focus on the partner relationship management of PepsiCo Indias main carrying and forwarding. To know the overall functioning of PepsiCo India is important in order to get an understanding of the topic. It is also important because is will explore the sales and distribution system of Pepsi India which is considered to be one of the strongest not only in the country but also worldwide. This project also covers a detailed observation and study of the VISI-PURITY campaign and the various retail initiatives specially related to the Slim Diet Cans and their acceptance in the Trans-Yamuna and Agra markets both of which are up market towns. The various observations and studies were done through route rides, direct marketing, market visits and from the sales team of PepsiCo India. The aim of the overall training was to have a complete and thorough understanding of the process of the various stages of product movement from the bottling stage to the final consumer and the various agencies which influence and help move these products. Also the study entails the various push and pull strategies actually used by us suffuse the trans Yamuna Market with slim diet cans and also studies the acceptance of the newly introduced Slim Diet Can range. Although this study will explore the overall functioning of PepsiCo India, but in order to be precise it will primarily concentrate on the beverage segment of PepsiCo India.

INTRODUCTION

Introduction
PepsiCo is one of the oldest, largest and most successful beverage and snack food companies in the world. PepsiCo was founded by Caleb Bradham in 1902 in USA. Today PepsiCo and its affiliates operate in more than 140 countries in the world and generate revenues in excess of $ 40 Billion. In its pursuit of never ending growth and expansion, PepsiCo entered India in 1989 in a joint venture with Punjab Government. However, PepsiCo India very soon started its beverage operations in collaboration with the R K Jaipuria group. Soon after entering the beverage segment PepsiCo Established its dominance in the market owing to its expertise in sales, marketing, operations and local collaboration. PepsiCo maintained its market dominance for many more years to come. However, this advantage slipped and PepsiCo had to concede the market leadership to Coca Cola India. Several actors were responsible for this development. But, the most important are; Ad campaigns targeting regional markets. Discontinuation of Slums in the distribution network by PepsiCo. This move by PepsiCo adversely affected its position of a market leader because while PepsiCo discontinued the use of Slums in its distribution network, Coke continued it and within one year, it was able to snatch considerable market share from PepsiCo. Acquisition of well-established and favored brands like Thums Up and Limca by Coca Cola India. These two brands still constitute a bulk of sales for Coca Cola India.

To explore the reasons behind these developments this study will analyze the marketing initiatives and policies of PepsiCo India in detail with particular focus on its partner relationship management. The above-mentioned objectives can be achieved by carrying a proper and planned research involving different types and methods. The data collected fo laid the foundations for the study and gave a platform for the analysis and findings which lead to the fulfillment of the objectives. The data collected for research is primary and secondary. Primary data is collected by observation, interviews and questionnaires. While secondary data is collected from the internet through different case studies and reports on the CSD industry. Observation method was carried in East-Delhi to know the market position and market share of PepsiCo products. Interviews of people from the sales department were conducted to know the sales and distribution network and marketing policies of PepsiCo India, while questionnaire method was used to know about the customer perception of the slim diet can portfolio. Secondary data is used to know about the CSD industry and the Company i.e. PepsiCo. The data collection and analysis paves way for the recommendation ad conclusion of the study that reveals some important findings regarding the strategy and corporate structure and strategy of PepsiCo India.

COMPANY

Company
The soda drink and bottled water industry includes more than 3,000 companies that manufacture and distribute beverages. Only in the USA combined annual revenue is more than $70 billion. Coca-Cola and PepsiCo hold more than 50 percent of the market, following strong consolidation in the past decade. Only a few other companies have annual revenue above $500 million. Most are local or regional manufacturing and bottling operations with annual revenue under $100 million.

Competitive Landscape:

Demand for non-alcoholic beverages is driven by consumer tastes and demographics. The profitability of individual companies depends on effective marketing. Large manufacturers have economies of scale in production and distribution, with average annual revenue per production worker close to $1 million. Small companies can compete by producing new products, catering to local tastes, or selling at lower prices.

Products, Operations & Technology:

Nonalcoholic beverages include sodas (carbonated soft drinks, or CSD), bottled waters, juices, and a large variety of mixtures. Sodas account for about 60 percent of the market. The manufacture and distribution of most national soda brands, including Coke and Pepsi, is a twotiered process. The primary manufacturer produces a flavored syrup called concentrate that is sold to local bottlers who manufacture and distribute the finished product. In a typical bottling operation, the flavored syrup, corn syrup (sugar), and filtered water are mixed in appropriate proportions, carbon dioxide gas is injected, and the finished soda product is poured into bottles or cans, which are capped, labeled, and packaged. The two-tiered structure is most efficient for national companies with large volume, because the manufacturing process is simple and because water, the main ingredient of sodas, is expensive to ship and is available locally. Smaller companies combine the syrup production and bottling operations in one plant. For soft drink bottlers, the major raw materials, aside from the flavored syrup, are corn syrup and containers -- glass bottles, aluminum cans, or plastic bottles made from polyethylene terephthalate (PET). Bottlers frequently operate sizable distribution systems, including warehouses and fleets of specialized delivery trucks. Production and distribution volume is usually measured in cases of 192 ounces, although actual cases of 12-ounce cans now contain 288 ounces. Coca-Cola produces more than 4 billion cases of soft drinks per year; PepsiCo, over 3 billion. In addition to producing canned and bottled soft drinks, large manufacturers sell sweetened syrups to restaurants and other retailers that produce the finished product at the point of sale by mixing the syrup with carbonated water to produce fountain products. About 35 percent of Coca-Cola's US product is in the form of fountain sales and 60 percent in bottled sales.

The manufacturing process for most non-soda beverages is usually more complicated than the mix-carbonate-and-bottle soda process and therefore isn't usually handled by local bottlers. In most cases, non-soda products are bottled by the manufacturer and distributed through the same types of channels--wholesalers, distributors, brokers--used by food manufacturers, although bottlers may also participate. Bottled waters, a rapidly growing category of beverage, are either bottled at specific springs or made locally from filtered tap water. Manufacturers and bottlers typically operate under contracts, called Bottler Agreements, that specify the territory within which the bottler has an exclusive right to make, sell, and distribute the manufacturer's brand in bottles or cans. Fountain products are often sold separately through wholesalers, under Distributor Agreements. Bottle and fountain territories may overlap and bottlers may also be fountain distributors. Coca-Cola sells products through about 80 local bottlers and 500 fountain wholesalers. Bottler Agreements usually require that container and packaging materials be bought from suppliers that are approved by the manufacturer, and that the bottlers not handle competing products. Agreements also specify the price that the bottler must pay for concentrate. The manufacturer has no control over the prices the bottler charges customers, and usually isn't obligated to spend money for marketing or promotions in the bottler's territory. Often, however, the manufacturer will provide marketing and promotion support. In one year, for example, CocaCola provided about $600 million in marketing support to Coca-Cola Enterprises, its largest bottler. Many Coke and Pepsi bottlers hold perpetual contracts that can be terminated only for breach of contract. The industry depends on technology for developing new products in the labs and packaging product at the plants. Most bottling plants are highly automated with a combination of mechanical automation and computerized robotics.

Sales & Marketing:

Beverage manufacturers, bottlers, and wholesalers sell products through a variety of channels, such as food and convenience stores, restaurants, vending machines, mass merchandisers, and institutions, including schools and colleges. Soda bottlers typically own local vending machines. The marketing

approach to each of these channels is quite different and often includes promotional spending. Large manufacturers may also sell directly to national accounts and usually advertise on national or regional TV and in print.

Manufacturers typically produce a line of brands and often test and introduce new products into the market through their existing distribution channels.

Target Segment Youth:

The child/youth market is of crucial importance to drinks manufacturers as under-19s constitute 20-30% of the population in western countries, making them a substantial and lucrative consumer base. With many life-long consumption habits formed during youth, gaining high penetration in the children's and teenagers' market is of key importance to manufacturers with long-term ambitions and growth targets. Targeting Soft Drinks to Youths enables companies to:

Assess the size of the soft drinks opportunity by age group Understand children's values and motivations and their impact on the soft drinks market Develop incumbent market position through enhanced targeting and promotion Assess trends in new product development in the children's market over the course of the past 2 years
Combine business to business executive opinion and local field research

Analysis and Industry Challenges:

In order to survive in this environment, companies must consider the market trends that will likely shape the industry over the next few years. This will help soft drink companies to understand the

challenges they will encounter and to turn them into opportunities for process improvement, enhanced flexibility and, ultimately, greater profitability. Market trends for the soft drink industry can be summarized by six fundamental themes: Changing consumer beverage preferences, featuring a shift toward health-oriented wellness drinks Growing friction between bottlers and manufacturers in the distribution system Continually increasing retailer strength Fierce competition Complex distribution system composed of multiple sales channels Beverage safety concerns and more-stringent regulations Consumers turn to wellness and healthy drinks

In much of the developed world, a significant portion of the population is overweight or obese. This includes two-thirds of Americans and an increasing number of Europeans. Consequently, many people have started to actively manage their weight and change their Lifestyles, a shift that is reflected in their choices in the beverage aisles: Demand has increased for beverages that are perceived to be healthy Energy drink consumption has also climbed, due to the increasingly active lifestyles of teenagers

This trend towards healthier drinks has created a number of new categories, and changed the consumption trends of the beverage industry as a whole. While previously dominated by carbonated soft drinks, the industry is now more evenly balanced between carbonates, and product categories with a healthier image, such as bottled water, energy drinks and juice:

While carbonates are still the largest soft drink segment, bottled water is catching up fast, with an average of 58 liters consumed annually per capita. Among individual countries, Italy ranks number one in bottled water consumption, with the average Italian drinking 177 liters per year. Overall, bottled water represents the fastest growing soft drink segment, expanding at 9 percent annually. This growth is being partially driven by increasing awareness of the health benefits of proper hydration. The industry has responded to consumers desire for healthier beverages by creating new categories, such as energy drinks, and by diversifying within existing ones. For example, the leading carbonated soft drink companies have recently introduced products with 50% less sugar that fall mid-way between regular and diet classifications. Similarly, a South African juice company has recently released a fruitbased drink that contains a full complement of vitamins and nutrients.

Beverage companies and bottlers are conflicting:

In the soft drink markets of Europe and the US, beverage companies use bottlers to package and distribute products. This structure often causes conflicts of interest between manufacturers and bottlers. Nevertheless, the supply chain must consistently deliver value to the market in order for the segment to prosper. Despite any dissonance, the concept of one face to the customer must be maintained.

Many factors are contributing to the friction between bottlers and beverage companies: Beverage companies often profit from increased concentrate sales at the expense of bottlers margins Beverage companies have historically had higher returns and lower capital requirements Bottlers have historically had lower returns and higher capital requirements for building and maintaining production and distribution networks Bottlers continue to consolidate in an attempt to offset margin pressure through cost reduction. Specifically, size helps them to: Spread fixed costs over greater volume Make larger investments in automated production lines Contain the costs of acquiring new customers Increase customer loyalty Declining prices have further reduced bottlers margins

Soft drink manufacturers continue to develop new products and packaging, which increases operational complexity and, therefore, expenses for bottlers. More new soft drinks have been introduced in the last two years by the top beverage companies than were introduced in the entire decade of the 1990s. Examples include: Coke with Lemon, Vanilla Coke, Dr. Pepper Red Fusion, Pepsi Blue, DnL, Fanta Berry, SoBe Mr.Green, Sierra Mist, and Mountain Dew Code Red. While manufacturers view these new products as a way to build a portfolio of options to hedge against product successes or failures, bottlers see them as a burden since they often require additional capital expenditures.

Retailers power continuously increases:

With Big Bazaar , Vishal and other discount stores leading the charge, Indias dominant retailers are demanding better service and shorter order-to-delivery cycles from soft drink companies. This is dramatically reshaping the industry, forcing soft drink companies to become more efficient, while taking pricing power out of their hands. The dual need for improved supply chain agility and cost efficiency is challenging suppliers to reevaluate the ways in which they plan and manage their supply chains, as they constantly search for approaches that will help them achieve the rock-bottom prices and operational excellence now expected in the industry.

Furthermore, the growth of private-label products is encouraging manufacturers to take a number of steps to compete more effectively. Increasingly, they are turning to innovation and new product introduction as a means to achieve real differentiation as well as growth. Branded manufacturers are also looking to get closer to the consumer, with many of the larger ones piloting direct-to-consumer marketing approaches. They are also trying to better understand the in-store consumer experience by monitoring the execution of in-store activities. Nevertheless, many suppliers are losing brand equity. In recent years, a couple of factors have been fueling the growing competition between manufacturers and

Retailers:
Retailers are using their power to set higher standards for marketing and operational excellence, including escalating demands for improved service quality and shorter order-to-delivery cycles from manufacturers and distributors. Because of their direct relationships with consumers, retailers have a deeper knowledge of consumer behavior. Competition is becoming more and more difficult:

In the beverage manufacturing industry, competition is growing due to the following factors:

Constant demand for new niche products related to consumer preferences for healthier and more diversified offerings Industry consolidation, which has significantly raised the bar for the scale needed to compete

CHANNELS OF BEVERAGE INDUSTRY

The beverage industry is a multi-channel industry. Therefore, soft drink companies have several types of customers with diverse characteristics:

Modern Trade/Large Chain Retailers

Greater power in negotiating purchases of concentrations and merges Direct access to the consumer and a tendency to protect this relationship from manufacturer intrusion Request contributions and discounts from brand companies

Small Individual Retailers

Huge number of small point sales Sometimes buy products directly through cash and carry or modern trade

Indirect Channel (wholesalers)

Medium-sized organizations as a consequence of aggregation through consortia and merging Playing a fundamental role in beverage distribution Possess critical information regarding individual points of sale in terms of volume, assortment, presence of competitors beverages, etc. Due to the complexity of the marketplace, the entire logistical chain must be able to sustain brands, products and services coherently within the various channels, taking into account differing points of sale and diverse customer needs. Additionally, each beverage manufacturer must provide customers with an extensive set of packaging options, including: Tracking product in various package sizes Special labeling requirements for customers International/domestic packaging Tracing / recall capabilities. Statutory regulation is increasing.

Governments around the world are concerned about food safety and quality. Periodically, safety failures make big news in the global press. Amid this growing concern, regulators are cracking down on sanitation and a variety of other food-safety requirements. Each soft drink company must take these industry challenges into consideration, as well as its own strengths and market position, when looking for ways to drive innovation, accelerate growth and increase margins.

Industry Process Improvement Opportunities

Improve customer relationships with Direct Store Delivery: Branded beverage manufacturers are attempting to get closer to the consumer, with many larger manufacturers piloting direct-to-consumer marketing approaches. These include active monitoring of instore activity and, in some markets, a significant move back to direct store delivery (DSD). Direct Store Delivery is a business process used in the beverage industry to sell and distribute goods directly to the customers point-of-sale. With DSD, the soft drink company gets in direct contact with retailers, restaurants and pubs and other outlets where consumers can obtain the product. Manufacturers can use DSD to: Make beverage goods available to stores and customers quickly Optimize process settlement in sales and distribution through complete coverage of the supply chain Improve customer retention and build customer relationships through personal service Realize additional sales opportunities Obtain first-hand information about the market Better position brands against competitors Ensure product quality up to the point of sale

Best in class DSD companies couple the process of direct delivery with a cultural change in how they view their employees and how their delivery personnel operate: They are not just drivers but they have sales skills, communication skills and a global view of the companys offerings, commercial priorities, and initiatives. Direct Store Delivery is characterized by variable orders and deliveries. Consequently, the process should involve more than just bringing goods to the point of sale. It should eventually encompass taking additional orders, picking up empties, collecting money, and more. Best in class DSD operations typically include many value added activities, such as:

Merchandising activities - Enables the company to leverage frequent delivery visits to the point
of sale. These activities include tracking merchandising of other entities (suppliers, wholesalers, etc.); reporting on in-store merchandising activities; carrying out competitive intelligence (competitive products, product mixes, prices, displays, etc.); and monitoring store/account execution. May also include some preventive maintenance.

Additional sales opportunities

- Allows a company to sell goods off the truck without any

preceding order. The mix of products on the truck is dependent on what is most likely to be sold on a certain trip. Support provided by handheld devices enables drivers to skip back-end paperwork and to close the process through printed invoices.

Enhance relationship with indirect partners - Indirect sales are the process of selling to an
end customer through a third party and tracking that sale as such. Due to the complexity of the beverage supply chain, conflicts of interest frequently arise between beverage manufacturers and beverage distributors:

Soft drink manufacturers profit from increased sales at the expense of distributors margins Soft drink distributors profit from positive local pricing environments, which, if exploited, reduce volume sales

Soft drink distributors continue to consolidate in an attempt to offset margin pressure through cost reduction

Despite these conflicting interests, it is crucial that beverage manufacturers and beverage distributors maintain one face to the customer. These companies jointly market and sell the product in the marketplace, and close co-operation yields benefits for both parties. The indirect relationship is a partnership that must be nurtured by both the supplier and the distributor. The stakes are high for everyone. For the manufacturer, a poor relationship with a distributor may cause it to give a competitor greater share of mind in the local marketplace. For the distributor, a negative relationship with a supplier means constant threats of contract termination and reduced marketing dollars spent in the local market. A strong manufacturer/distributor relationship is also important because consumers are becoming more difficult to capture and classify. It is not only about sales; it is also about information. But how can strategic information flow freely between partners? Although sharing is implied in the word partnership, the reality is that companies are still uncomfortable about exchanging strategic information. Nevertheless, it is critical for companies to share information regarding sales volume and market intelligence on both the microscopic and macroscopic levels. The importance of the distributors role in the indirect channel for beverage distribution suggests that it would be beneficial to establish a common understanding between distributors and manufacturers regarding: Coding (products, channels, customers) Technology Data interpretation Marketing and sales actions.

In some cases, distributors are small- to medium-sized companies that only dedicate a few people fulltime to operational activities. As a result of this structure, they are rarely open to implementing a truly collaborative environment. Recently, however, mergers between distributing companies, and acquisitions of distributing companies by manufacturers, have significantly modified many operating and ownership structures.

Consequently, a few well-structured and managed distributors have emerged that possess a better understanding of the value of collaboration. These distributors have been at the forefront of facilitating partnership initiatives.

Increase sales force effectiveness through incentives management In the beverage industry, the critical path to a companys success is the effectiveness of its sales force. No matter how efficiently the company runs its manufacturing processes, or how well it markets its products, a beverage company cannot succeed without an effective sales force that ensures product placement on the store shelves. A beverage manufacturers sales force typically comprises 17%-25% of the companys cost basis. Beverage distributors have an even higher percentage of their tot al costs allocated to their sales forces. Yet, how can beverage companies get the most out of their investments and ensure that their sales forces are operating optimally? Properly managed commission programs allow beverage companies to effectively motivate their sales forces to increase or maintain volume by brand or package. A commission could be a rebate, discount, or other payment to a third party or in-house employee. In order to actively manage sales behavior, it should be paid when the internal or external sales representative meets a pre-established benchmark for a tracked metric. The commission could take the form of either a cash payment or an item. While commissions are usually paid based on sales volume, best-in-class companies take a more holistic view of commission metrics. Some other important measures include: Account revenue growth Profit results Number of new accounts Customer service metrics Account retention.

Manage safety requirements through tracking and traceability

As recent history has shown, the ability to track inventory accurately and to perform a timely and costeffective product recall is critical in the beverage industry. Inventory items need to be tracked, monitored, and controlled in different ways and at very detailed levels. In each individual plant or warehouse, each resource requires a different level of control/analysis. Food safety legislation, such as EU Directive 178, impacts the whole process flow. Traceability is a goal that must be achieved over the entire value chain, requiring a batch control system that is able to track and document all related characteristics.

At the batch level, it is now possible to assign different product attributes when searching for the product including: Manufacturing Expiration Dates Shelf Life Dates

Classifying production lots into batches allows companies to identify specific inventory and automatically record its history, including the history of the raw materials (and their associated batch numbers) used in its production. In other words, it allows full recall of the materials that have been involved in the overall manufacturing process. These improvements reduce the companys exposure to litigation and regulatory fines. In addition, track and trace improvements help companies to maintain high quality standards, which is often a selling point that differentiates one brand from another and that can command a price premium with the consumer. Recording and tracking that quality is critical. In the final analysis, soft drink

companies must strive for the highest quality standards they can achieve ones that are superior to those of their competitors.

Optimize the extended supply chain:In a business environment characterized by strong competition, changing consumer preferences, a complex distribution channel, and conflicting relationships between soft drink manufacturers and distributors, the beverage supply chain is under significant pressure. Moreover, the worlds dominant grocery retailers (with Wal-Mart paving the way) continue to demand increasingly better service quality and shorter order to delivery cycles from manufacturers. This confluence of factors is forcing manufacturers to become more efficient, while taking pricing power out of their hands. The need for both improved supply chain agility and cost-efficiency is challenging suppliers to re-assess how they plan and manage their supply chains. The logistic chain must be able to sustain brands, products and services cohesively, while taking into account different channels, customers, points of sale and customer needs. Accordingly, companies should consider taking the following steps to improve their supply chains:

Ensure product availability on-shelf On-shelf availability is becoming a critical

issue for both manufacturers and retailers. A system that avoids out-of-stocks improves consumer value, builds brand and store loyalty, increases sales and most importantly boosts category profitability. The traditional practice of filling out-of-stocks with other products is no longer sufficient particularly from the manufacturers point of view. If consumers cannot find the brand they want, their loyalty to that brand suffers. A 2002 GMA study found that out-ofstocks jeopardize $6 billion in retail sales every year. Less conservative estimates put this figure as high as $20 billion.

Flexible ordering; flexible delivering Most retailers are demanding increased

flexibility in order lead-times and delivery methods, putting additional pressures on the supply chains of manufacturers and distributors. To withstand these pressures, companies need to streamline product movement through programs such as store-specific shipments. They must

also meet the strategies of progressive retailers, which require flow-through distribution and cross-docking.

Accurately forecast demand

Properly forecasted demand drives two of the

primary metrics used to measure the efficiency of a beverage companys supply chain: customer service and inventory. Accurate forecasts are essential to achieving improved customer service and lower inventory levels. Even with recent success in developing and maintaining efficient supply chain processes, forecasting inaccuracy remains a significant industry problem. According to the 2003 GMA Logistics Study, more than one-third of all forecasts are inaccurate at the national level. This figure jumps to almost one out of every two at the regional (distributioncenter) level. Meanwhile, at the store level, differences in store formats and sizes hamper the forecasting process, and few have the tools to accurately manage the sheer volume of data generated by forecasting. Furthermore, many manufacturers do not have the technology to properly support their planning and forecasting efforts. Many manufacturers are still forecasting sales in months, although their plants run on weekly plans. That means they have to squeeze weekly totals out of monthly boxes.

Implement a fully integrated empties management process

Empties

management is the process of managing returnable containers, including kegs, CO2 tanks, bottles and crates(an essential part of direct store delivery). A successful empties management system gives the manufacturer a detailed picture of the entire empties lifecycle, including the location and status of a companys assets. This process:

Lowers costs by controlling high-value empties assets Increases control by managing empties at customer locations Decreases manufacturing issues by tracking empties. Reduce time-to-market for new products

An efficient new product development system is essential in the beverage industry. New products need to be brought to market quickly in order to capitalize on changing consumer preferences and competitive threats. However, new products must be developed tactically, and the products potential must be understood and analyzed before it hits the market. Currently, success rates for new products

are astonishingly low dropping from 75% to 25% in the last decade according to AMR and most fail within the first two years after introduction. The companies that are best able to execute the whole product development cycle will clearly have an advantage. This requires reducing time-to-market as well as making effective use of scarce internal resources and improving collaboration with partners. In addition, great attention must be paid to aligning the related marketing initiatives (e.g. advertising, sales promotions, etc.) with the new product introductions. Innovation is one of the primary growth drivers for beverage companies, and it can involve changes to the product itself or to the products packaging: Product innovation Focuses on providing new tastes and flavors to demanding consumers. Packaging innovation - Emphasizes developing differentiated packaging according to the consumption situation. Often, beverage manufacturers use packaging innovation to increase product shelf life.

To ensure new product success, beverage companies must oversee the integration, consolidation and reuse of knowledge from all involved parties (including beverage manufacturers and bottlers), from R & D through production, and down to sales, marketing, and financials. By emphasizing greater collaboration and implementing Web-based workflow, beverage companies can reduce lead-time from concept to shelf by 25 - 40% and, at the same time, better integrate safety controls into the development process.

Increase customer retention through effective trade promotions:

In an environment characterized by strong retailers and discriminating consumers, beverage companies must utilize processes and tools to protect their market shares. To do this, they must make a favorable impact at the point of sale through promotional activity.

Trade promotions have become a necessary and expensive cost of doing business. With a sizable percentage of volume being driven through a smaller base of retailers, the competition for shelf space has never been higher. If a beverage company fails to execute a trade promotion at Wal-Mart, a competitor will. Furthermore, as trade promotions have proliferated over the past few years, they have also become more targeted. In response, beverage companies must create promotions for specific demographics, channels, and retailers, which make the sales process more costly and complex. Trade promotions vary widely in terms of method, approach, and structure. Many local promotions are run ad-hoc with marginal capital investments by field sales associates, while others require significant investment and involve pre-scheduling in co-operation with national chains. Two of the most commonly used trade promotions in the beverage industry are coupons and rebates. Coupon and rebate management are critical to enhancing relationships between the beverage manufacturer and wholesalers, customers and, in the case of coupons, consumers.

Coupon programs, which are in essence trade promotions addressed to the final consumer, are
mainly executed via discounts at large retailers. The coupon, a certificate with a stated value, can be applied immediately or reserved for the next purchase. A properly executed coupon program enables beverage companies to pass savings directly to the end consumer. On the other hand, rebate programs are trade promotions addressed to the retailer. Therefore, contractual terms and conditions between the manufacturer and the retailer must be monitored and executed. Rebates are often part of special trade promotions, and management of the rebates typically follows one of the following flows:

Figure - Rebate management in direct sales

Figure- Rebate management in Indirect Sales

Improve margins by optimizing the telesales channel

For a large number of companies in the beverage industry, telephone sales is the primary method of order taking and customer interaction. An effective telesales process can increase revenues and complement other sales processes, such as DSD and field assets management. This is accomplished by integrating the phone sales function with the companys other operations. When correctly executed, inbound and outbound telesales functionality enables companies to manage effectively and efficiently all contacts related to sales and customer services. In addition, it helps build client relationships, sell new business, and expand and retain the current customer base. Well-implemented telesales functionality also enables business processes to be integrated and standardized. This effectively closes the loop, creating a consistent experience for customers within a multi-channel environment. Some of the key benefits that a company can gain through telesales include:

Revenue Enhancement
Improved sales effectiveness by consolidating the customer relationship Better up-selling Improved cross-selling Increased customer retention Expanded customer base Enhanced competitiveness via services that match or surpass those of competitors

Margin Improvement
Reduced costs for order processing Accelerated sales process Lower sales costs in comparison to field sales Increased flexibility and speed to market Differentiated service levels according to customer relevance and need.

Implementing closed-loop processes between the telesales operations and other departments can provide agents with a comprehensive view of all customer interactions across the enterprise in real time. In order to optimize the telesales channel, agents must have tools to manage the entire sales process, from generating leads, planning calls, and prioritizing sales opportunities and activities, to managing contacts and placing orders quickly. Business performance improvement priorities the path to value Against the backdrop of these market challenges, how can soft drink companies drive profitable growth and create value for their owners or shareholders? In practical terms, there are four areas on which companies in the soft drink business need to focus: Revenue protection and enhancement for example, as driven by product and packaging innovation, differentiated quality, improved product availability, and better management of customer relationships Cost reduction/margin improvement for example, through improved operational efficiency, lower labor costs, reduced waste and the capture of operational synergies from acquisitions Improved asset utilization for example, through reduced inventory levels of soft drinks held in cold storage and faster turnaround of re-usable transit packaging in the supply chain Regulatory/assurance for example, through demonstrating quality by participating in retailer assurance schemes and assisting trade customers in achieving full compliance with new traceability legislatiON

PEPSICO INTERNATIONAL HISTORY OF PEPSICO

1893--Caleb Bradham, a young pharmacist from New Bern, North Carolina, begins experimenting with
many different soft drink concoctions; patrons and friends sample them at his drugstore soda fountain.

1898--One of Caleb's formulations, known as "Brad's Drink," a combination of carbonated water, sugar,
vanilla, rare oils and cola nuts, is renamed "Pepsi-Cola" on August 28, 1898. Pepsi-Cola receives its frist logo.

1902-- Bradham applies for a trademark with the U.S. Patent Office, Washington D.C., and forms the
first Pepsi-Cola Company.

1905--Pepsi-Cola's first bottling franchises are established in Charlotte and Durham, North Carolina.
Pepsi receives its new logo, its first change since 1898.

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 of competitive colas). Caleb Bradham, the founder of Pepsi-Cola and "Brad's Drink," dies at 66 (May 27th, 1867-February 19th, 1934).

1941--The New York Stock Exchange trades Pepsi's stock for the first time.
In support of the war effort, Pepsi's bottle crown colors change to red, white, and blue.

1960--Young adults become the target consumers and Pepsi's advertising keeps pace with "Now it's
Pepsi, for those who think young."

1963-- Pepsi-Cola continues to lead the soft drink industry in packaging innovations, when the 12ounce 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.

1965--Expansion outside the soft drink industry begins. Frito-Lay of Dallas, Texas, and Pepsi-Cola
merge, forming PepsiCo, Inc. Military 12-ounce cans are such a success that full-scale commercial distribution begins.

1970--Pepsi introduces the industry's first two-liter bottles. Pepsi is also the first company to respond
to consumer preference with light-weigh, recyclable, plastic bottles.

1984--Pepsi advertising takes a dramatic turn as Pepsi becomes "the choice of a New Generation." 1985--After responding to years of decline, Coke loses to Pepsi in preference tests by reformulating.
However, the new formula is met with widespread consumer rejection, forcing the re-introduction of the original formulation as "Coca-Cola Classic." The cola war takes "one giant sip for mankind," when a Pepsi "space can" is successfully tested aboard the space shuttle.

1991-- Pepsi introduces the first beverage bottles containing recycled polyethylene terephthalate (or
PET) into the marketplace. The development marks the first time recycled plastic is used in direct contact with food in packaging.

1992-- Pepsi-Cola and Lipton Tea Partnership is formed. Pepsi will destribute single serve Lipton
Original and Lipton Brisk products.

1994-- Pepsi Foods International and Pepsi-Cola International merge, creating the PepsiCo Foods and
Beverages Company.

1997-- PepsiCo. announces that it will spin off its restaurant division to form Tricon Global Restaurants,
Inc. Including Pizza Hut, Taco Bell, & KFC, it will be the largest restaurant company in the world in units and second-largest in sales.

1998-- Pepsi celebrates its 100th anniversary.

PEPSICO INDIA

Introduction:
PepsiCo entered India in 1989 and in the span of a little more than a decade it became the country's largest selling soft drinks company. The Company has invested heavily in India making it one of the largest multinational investors. The group has built an expansive beverage, snack food and exports

business and to support the operations are the group's 43 bottling plants in India, of which 15 are company owned and 28 are franchisee owned.

PepsiCo stays committed to providing its consumers with top quality beverages. Its diverse portfolio of brands include the flagship cola brand - Pepsi; Diet Pepsi; 7Up; Mirinda; Mountain Dew; Slice fruit drink; Tropicana brand 100% fruit juices in various flavours; Aquafina packaged drinking water; Gatorade plus local brands Lehar Evervess Soda, Dukes Lemonade and Mangola.

PepsiCo is also a dominant player in the snack food segment in India. PepsiCo's snack food company Frito-Lay is the leader in the branded potato chip market. It manufactures Lay's Potato Chips; Cheetos extruded snacks, Uncle Chips; traditional namkeen snacks under the Kurkure and Lehar brands; and Quaker Oats.

PepsiCo is one of the largest MNC exporters in India and its export business consist of three categories - agri business, commodities and Pepsi system sales. PepsiCo has made significant investments with the Punjab Agriculture University to develop a comprehensive agro-technology program that has helped thousands of farmers across India improve the yield of their farms and the quality of their agricultural products. PepsiCo has leveraged its knowledge in contract farming to develop seaweed cultivation in Tamil Nadu and has partnered with the Government of Punjab to help farmers of the state through the utilization of developed technology for citrus farming. As part of its sustainable development initiatives, PepsiCo India has been a committed leader in the promotion of rain water harvesting, water conservation recycling and the reduction of effluent discharge. PepsiCo has also established zero waste centers and PET recycling supply chains and assisted victims of natural disasters. PepsiCo stays dedicated in its endeavor to develop community outreach programs by supporting rural water supply schemes, administering

medical camps in villages, providing computers to rural schools and creating opportunities for women in rural areas through vocational training as an alternate means of livelihood.

PEPSICO INDIA WITH RKJ GROUP:

Vision
Being the best in everything we touch and handle.

Mission Continuously excel to achieve and maintain leadership position in the chosen businesses; and delight all stakeholders by making economic value additions in all corporate functions.

It can be said with absolute certainty that the RKJ Group has carved out a special niche for itself. Our services touch different aspects of commercial and civilian domains like those of Bottling, Food Chain and Education. Headed by Mr. R. K. Jaipuria, the group as on today can lay claim to expertise and leadership in the fields of education, food and beverages.

The business of the company was started in 1991 with a tie-up with Pepsi Foods Limited to manufacture and market Pepsi brand of beverages in geographically pre-defined territories in which brand and technical support was provided by the Principals viz., Pepsi Foods Limited. The manufacturing facilities were restricted at Agra Plant only. Varun Beverages Ltd. is the flagship company of the group.The group also became the first franchisee for Yum Restaurants International [formerly PepsiCo Restaurants (India) Private Limited] in India. It has exclusive franchise rights for Northern & Eastern India. It has total 46 Pizza Hut Restaurants & 1 KFC Restaurant under its company. The group added another feather to its cap when the prestigious PepsiCo International Bottler of the Year award was presented to Mr. R. K. Jaipuria for the year 1998 at a glittering award ceremony at PepsiCos centennial year celebrations at Hawaii, USA. The award was presented by Mr. Donald M.

Kendall, founder of PepsiCo Inc. in the presence of Mr. George Bush, the 41st President of USA, Mr. Roger A. Enrico, Chairman of the Board & C.E.O., PepsiCo Inc. and Mr. Craig Weatherup, President of Pepsi Cola Company.

Strategic Divisions:

PepsiCo India consists of different divisions that include Beverage division, Snack food division and the Restaurant division (Yum Restaurants India Pvt. Ltd.). These divisions work as separate SBUs and have their separate management.

PepsiCo India divided its beverage division into different operating divisions. The heads of these divisions report directly to the CEO. The heads of these divisions are in charge of their respective areas and are accountable for the proper functioning of all the regions. The FOBOs also report to the regional heads apart from the COBOs.

Beverages

MARKETING OVERVIEW OF PEPSICO INDIA

Marketing Environment:
Marketing environment is the overall environment in which a Company operates. This consists of the Task Environment and the Broad Environment.

Task Environment
Task Environment includes the immediate players involved in producing, distributing and promoting the offering. The main players are the company, suppliers, distributors, dealers and the target customers. Suppliers include the material and service suppliers such as marketing research agencies, advertising agencies, banking and insurance companies, transportation companies, and telecommunications companies. The dealers and distributors include agents, brokers, manufacturer representatives and others who facilitate finding and selling to customers.

The suppliers for PepsiCo India include the bottle suppliers for the soft drinks. These include the Pet bottles and the Glass bottles. One of the most vital products required in the operation is Refrigerator. PepsiCo does not manufacture the refrigerators, instead they are supplied by different vendors who get time bound contracts from the company. The distributors and dealers are part of the sales and distribution network. This will be explained later under the section of Place, in the 4 Ps segment. The target customer for PepsiCo is primarily the youth. But, because of increasing competition from Coke PepsiCo has expanded its target customer base which now includes people who are prospects for beverages beyond the CSD category. PepsiCo has started targeting this segment by offering products in the Non- CSD category, these include fruit based non-carbonated drinks, juice based drinks, energy drinks, sports drinks, snack food (from the snack food division i.e. Frito Lay).

Broad Environment:
This contains forces that can have a major impact on the players in the task environment. This includes six components: demographic environment, economic environment, physical environment,

technological environment, political legal environment, and socio cultural environment. Companies need to pay close attention to the trends and developments in these environments and make timely adjustments to their marketing strategies in order survive and succeed in the market. This will be explained in detail in the strategic marketing segment.

Marketing Mix / 4 Ps:

Marketing Mix has been defined as the set of marketing tools that a firm uses to pursue its marketing objectives. These tools are classified into four broad groups, namely, Product, Price, Place and Promotion. Marketing mix decisions should be made to influence trade channels as well as final consumers. A firm can alter any of the four Ps accordingly, including changes in the product and distribution channel as well.

The four Ps represent the sellers view of the marketing tools available for influencing buyers. Whereas, from a buyers point of view, each marketing tool is designed to deliver a customer specific benefits according to his or her requirements.

Marketing Mix

Target Market

Marketing Variables: The Four P Components of the Marketing Mix

Place

Channels Coverage Assortments Locations Inventory Transport

Product

Product

Prod. Variety Quality Prod. DesignVariety Features Brand Name Quality Packaging Sizes Design Services Warranties Features Returns

Price

Promotion

Brand Name Packaging Sizes Services Warranties Returns

List Price Discounts Allowances Payment period Credit Payments

Sales Promotion Advertising Sales Force Pubic Relations Direct Marketing

Product:Pepsi offers different variety of products ranging from carbonated to Non Carbonated
Soft Drinks. These include Pepsi Cola Mirinda ( Lemon and Orange ) 7 Up Dew Slice Tropicana Aquafina (Mineral Water)

These Products come in different size 200 ml, 300 ml, 600 ml, 1200 ml, 2 lt. there are nearly 42 SKUs which are monitored and regulated on daily basis.

Product Quality:
This is one of the most important aspects that any Co. needs to address. Specially in the case of Pepsi this is even more important because of the controversies and claims regarding the CSE report on Pesticides in Pepsi. Therefore pepsi has to maintain stringent quality norms and standards and norms. Pepsi does that by following one quality standard worldwide and according to the official website of pepsi, the Co. maintains that : At every level of Pepsi-Cola Company, we take great care to ensure that the highest standards are met in everything we do. In our products, packaging, marketing and advertising, we strive for excellence because our consumers expect and deserve nothing less. We promise to work toward continuous improvement in all areas of our organization. At every step of our manufacturing and bottling process, strict quality controls are followed to ensure that Pepsi-Cola products meet the same high standards of quality that consumers have come to expect and value from us. We also follow strict quality control procedures during the manufacturing and filling of our packages. Each bottle and can undergoes a thorough inspection and testing process. Containers are then rinsed and quickly filled through a high-speed, state-ofthe-art process that helps prevent any foreign material from entering the product. Additional

quality control measures help to ensure the integrity of Pepsi-Cola products throughout the distribution process, from warehouse to store shelf.

Brand Name:
This is the most important thing any Co. in this Business needs to do if it wants to remain and succeed in the Business. Pepsi has successfully done that for so many years. Pepsi has targeted the youth and has invested heavily in advertising and building a brand image (by launching several campaigns and roping in mega stars such as Shahrukh, Sachin, ganguly, Dravid etc.) that attracts to the youth and this is one of the main reason for the success of Pepsi.

Packaging and Size : The products are available in packaging and sizes. This is done to
facilitate the use according to the requirements of the Customer. Different packaging also affects the usage pattern of the product in various markets. e. g. sale of 2 lt. bottles is high in areas in which middle and high income group customers stay. But the sale of 200 and 300 ml bottles is high in areas where people in the lower income group bracket stay. The sale of 600 ml bottles is high in areas where students etc. stay. Different packaging is also provided for different products like Tetra Packs, Pet Bottles and Glass Bottles (in 200 and 300 ml).

Services, Warranties, Returns : There are no warranties and services (post sales)
provided for these products but there is provision of returns in case there is any problem with the product, e.g. leak or burst bottle, half filled bottle etc. The pet or plastic bottles are returned the same day and a replacement is provided for the same but in the case of glass bottles the retailer has to collect all the burst bottles and return it to the salesman around 25th of every month to get a replacement.

Price: List Price: The Price of each product is fixed and there is no discrepancy. Salesmen are not
authorized to make any change, alteration or give discounts unless authorized by the Company.

Discounts: Discounts are provided to Wholesalers and Slums but there is no discount for
retailers. The discounts are negotiated directly with the Company and the C&F or the Distributor point is not involved in the price negotiation.

Allowances: Allowances are given to salesmen on achieving their daily targets. This target is
given to every Salesman everyday before he goes on his designated route. The Depot In charge (Sr. C E / C E) gives the target to every salesman in consultation with the TDM.

Payment period and Credit terms: No credit is provided. The payment procedure is not
flexible as the retailers are required to make on the spot payments. At times, they defer the payment and in that case, the Salesman either shows a shortage or pays the rest of the amount by himself. The wholesalers are also required to make in advance but at times they also defer the payment and make the payment at a later date.

Promotion: Sales Promotion: This is the most frequently used form of promotion which is used to
increase the sale of the selected product. These promotions are used from time to time depending upon the sale of the products. If the sale of any particular product declines or shows a declining trend then a suitable Sales Promotion Campaign is launched to increase the sale of that product.

Advertising: Advertising is done by PepsiCo. COBO (Company owned Bottling Operations)

and FOBO (Franchisee owned Bottling Operations) have no say in the advertising campaigns and their planning. The advertising account of Pepsi is handled by JWT (J Walter Thomson) in association with the Corporate office of PepsiCo India.

Sales Force: There is a dedicated sales force at every C&F and Distributor point. Every
Salesman is assigned a specific route that he has to cover every day. The Salesman has to take care of all the Shops on the designated route and address and inform (to the Sr. CE / CE) about any issue any retailer has on the route. The Salesmen are also assigned the task of providing all the information to the retailers regarding the daily schemes and the details of all the promotion schemes launched from time to time. These include informing the retailer about the promotional

scheme, registration for the scheme, terms and conditions of the scheme etc. The Salesman is also assigned the task of registering maximum possible outlets on his assigned route.

Public Relations:
This is one important aspects related to the success of PepsiCo in India. Pepsi believes in maintaining good and healthy relations with all its Channel partners and every other person in the value chain. This has helped Pepsi in maintaining an extremely competitive position in the market in spite of the continuous onslaught from Coca Cola.

Place: Channels: Channels are independent organizations involved in the process of making a
product or service available for use or consumption. There are different intermediaries in channels that facilitate the availability of goods to the consumer.

Coverage: Two things come under market coverage. These are Market Reach and Market
Penetration. Market Reach can be termed as accessibility and Market Penetration can be termed as Frequency.

SALES AND DISTRIBUTION NETWORK OF PEPSICO INDIA.

COMPANY

COBO

FOBO

WAREHOUSE

C&F

DISTRIBUTOR

SALESMEN

SALESMEN

WHOLESALER

SLUMS

RETAILER

RETAILER

CUSTOMER

CUSTOMER

Initially the focus of the Company remains on reaching all the markets and then the Company shifts its focus on increasing the frequency of sales in the respective markets so that the sales and profitability of the Company can be increased. Company (PepsiCo): PepsiCo India provides the salt to all the bottling plants in the Country that carry out the bottling operations.

COBO: These are Company owned bottling operations operating directly under the Company.
Out of 32 bottling plants, PepsiCo owns 15.

FOBO: These are Franchise owned bottling operations. R K Jaipuria group does all the
franchisee-bottling operations for PepsiCo India; currently R K J Group has 17 bottling plants for Pepsi.

Warehouses: These are Company or franchisee owned warehouses spread over various
locations that cover the respective territories and come under the purview of their respective Area or Territory Offices. Stocks are sent from the bottling plants to these warehouses, from where they are sent to the C & F centers and Distributor Points.

C & F Centers: These are the biggest centers in the distribution network and receive proper
assistance from the Company (either COBO or FOBO). The C & F center is owned by a private player and not by the Company. The vehicles (Delivery Vans) are owned by the Company, and the Salesmen at the C & F points are on the Company Payroll.

Distributors: These are small, compared to C & F centers. Everything at the Distributor point
owned and managed by the distributor, even the salespersons are on the Distributors payroll.

Wholesalers: These are smaller than C & F centers and Distributor points and get the stock
directly from the Company or Franchisee. They get their stock directly from the Company and thus get special rates and extra discounts from the Company.

Slums: They are generally smaller than the Wholesalers are. However, they get special
discounts from the C & F centers and Distributor points.

All the different players in the distribution channel namely C & F centers, Distributor points, Wholesalers and Slums have different designated markets and are not supposed to operate in the market designated to any other player.

Retailer: Retailers are the most important chain in the distribution channel of Pepsi as they are
the only point of contact with the customers. Retailers get their stock from all the other channel members in the distribution channel.

STRATEGIC MARKETING OF PEPSICO INDIA

Demographic/ Economic Environment

Marketing Intermediarie s

Technological/ Physical Environment

Marketing Information System Suppliers

Target Customers

4 Ps

Marketing Planning System

Public

Marketing Control System

Marketing Organization & Implementation System

Competitors

Demographic / Economic Environment:

Demographic environment comprises of people of different ages and class. This helps the Company in identifying specific target market for specific products. Similarly, economic environment helps the Company in deciding how much to spend and accordingly price the products. Pepsi distributes its products considering this in mind. Cans are distributed in areas that have more youth population and two lt. bottles are distributed in areas that have more no. of families. 200 ml bottles are primarily distributed in areas with lower income group people.

Technical / Physical Environment:

Technical and physical environment refers to the technical capabilities and the infrastructural capabilities and requirements of the Company. Pepsi has access to the best technology for its products and it uses the same technology worldwide for its products. This was instrumental in helping Pepsi handle the pesticide controversy.

Political / legal Environment:

This is one of the most important factors that a company needs to consider while starting, establishing and expanding operations in any country. Legal Environment is important because a company needs to confirm to the laws of the land and carry out its operations accordingly. While political environment is important as it can play an important in forming opinions regarding the company. This is the reason why Pepsi operates in India in collaboration, initially it started its operations in India with Punjab Government and then it started its operations in the carbonated and non-carbonated beverage segment n collaboration with RKJ group.

Social / Cultural Environment:

This plays an important role in determining the acceptability of the product according to he socio cultural norms of the market and the effect the company has on each of these. Companies need to be very careful about this issue as people are very sensitive about their culture and may not tolerate any infringement. This determines the ingredients (of the products) and the type advertisement and promotions used by the Company. Because of these factors, Pepsi primarily uses Bollywood stars and Cricket stars in India as they are the biggest celebrities and role models and are widely accepted.

SALES AND MARKETING HIERARCHY OF PEPSICO INDIA.

MUM

UM

UM

TDM

MDM

ADC

MDC

CE

ME

SALESPERSONS

MARKETING ASSISTANTS

MUM Marketing Unit Manager:

In charge of specific zones (e.g. north, south, east, west) and report to the corporate office.

UM - Unit Manager:
In charge of day to day operations and supervision of all the functions within the organizations including operations, logistics, sales and distribution, marketing. The Unit Manager reports to the MUM.

TDM - Territory Development Manager:

TDM is the in charge of the sales and distribution network of a particular territory within a zone. Responsible for the daily, monthly and annual sales within the territory decides the daily schemes for products and incentives for salespersons. He is also responsible for cost effectiveness, profit generation and profit maximization within the territory.

MDM - Marketing Development Manager:

MDM is responsible for all the marketing activities and their effectiveness within a territory. Decides the format and time frame of the marketing and promotional activities and the incentives given to the retailers.

ADC - Area Development Coordinator:

Reports to the TDM, and is in charge of a C & F center and the distributor point in the area. He is directly responsible for any issues in the area and is supposed to ensure the smooth functioning of the entire sales and distribution network in the area. ADC is responsible for timely disposal of any issue faced by the retailers. He decides and approves the boards, displays and hoardings in the area.

MDC - Marketing Development Coordinator:

Reports to MDM, and is in charge of carrying out all the marketing activities in the area. He is responsible for the execution and success of marketing and promotional activities. Coordinates with the outside agencies for displays, boards, checks conducted in the market. He is also responsible to keep a check on the expenditure of the marketing activities in the market.

CE - Customer Executive:

Reports to the ADC and is in charge of the salespersons. He is required to visit the market and accompany every salesperson as frequently as possible. He is the first person to get information about the market / area and is the first contact if the salespersons or retailers face issue. Responsible for assigning and achieving daily sales target given to the salespersons.

ME - Marketing Executive:
Reports to the MDC and is responsible for the daily functioning of the marketing activities in the including awareness of promotions in the market and the response in the market

Salesperson:
They are the most important asset for the company as they are the ones who sell the products, are responsible for acquiring new customers, and retain the old ones. Their work also includes informing the retailers about the promotions and any new scheme launched. They are also required to push for the sale of any new product launched in the market and make sure that the retailers are following the company guidelines regarding the launch and the maintenance of Vizicoolers. They report to the CE.

Marketing Assistant:
Reports to the ME and is responsible for the distribution and usage of the displays and boards in the area. Also has to check whether retailers are following the guidelines of the company regarding promotional displays, other displays and displays in the Vigicoolers. They report to the ME. Pepsi is one of the most well known brands in the world today available in over 160 countries. The company has an extremely positive outlook for India. "Outside North America two of our largest and fastest growing businesses are in India and China, which include more than a third of the worlds population." (PepsiCos annual report, 1999) This reflects that India holds a central position in Pepsis corporate strategy. India is a key market for Pepsico, and at the same time the company has added value to Indian agriculture and industry. PepsiCo entered India in 1989 and is concentrating in three focus areas Soft drink concentrate, snack foods and vegetable and food processing. Faced with the existing policy framework at the time, the company entered the Indian market through a joint venture with Voltas and Punjab Agro Industries. With the introduction of the liberalisation policies since 1991, Pepsi took complete control of its operations. The government has approved more than US$ 400 million worth of investments of which over US$ 330 million have already flown in.

One of PepsiCos key strategies was to develop a completely local management team. Pepsi has 15 company owned factories while their Indian bottling partners own 28. The company has set up 8 greenfield sites in backward regions of different states. PepsiCo intends to expand its operations and is planning an investment of approximately US$ 500 million in the next three years.

Sustainable Competitive Advantage:

Competitive advantage is a companys ability to perform in one or more ways that its competitors cannot or will not match. When a company is able to maintain that advantage a long period of time that gives it an edge over its competitors then, this advantage is termed as sustainable competitive advantage. Any competitive advantage must be seen by customers as a customer advantage. Then only that competitive advantage can be transformed into a sustainable competitive advantage.

Three major competitive advantages give PepsiCo India a competitive edge in the market place. They are:

Big Muscular Brands built through better market positioning and heavy investment in advertising and promotions; Proven ability to innovate and create differentiated products through superior operating base; Powerful go to market system built with the help of superior relationship base and an impeccable sales and distribution network.

Making it all work are the extraordinarily talented and dedicated people who are an integral part of PepsiCo India.

Communicating with the Customer:

Marketing Communication is the means by which firms attempt to inform, pursued and remind consumers directly and indirectly about the products and brands they sell. Marketing Communication is the central instrument of making brand equity. Marketing Communication consists of six major modes of communications called the marketing communication mix.

Advertising. Sales promotion. Events and Experiences. Public Relations and Publicity. Direct Marketing. Personal Selling.

Although PepsiCo uses all the modes in some form or the other, but this study will examine various aspects of communication with the internal customers.

OBJECTIVE OF STUDY

OBJECTIVE OF STUDY

The purpose of research is to discover answers to questions through the application of the sciencetific procedures the main aim is to find out the truth which is hidden and which is not yet discovered yet

To find the share of PepsiCo and coca-cola in soft-drinks To study the preference of people for soft drink To determine the target market for soft drinks.
To identify the ways to increase the market share of PepsiCo

in soft drinks.
To identify the impact of distribution on sales

RESEARCH METHODOLOGY

RESEARCH METHODOLOGY
Every research methodology includes a research design which may be defined as the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research process with economy in procedure. The sampling method that I am being using is the stratified sampling method, the reason behind using this method even though the time consumption when taken into consideration is more is to divide the whole set of population I am considering for my work into different group according to type of information gathered from each set and by that a perfect co-relation could also be done. My data collection processes would consist of series of procedures which would be further divided into primary and secondary data collection. The secondary data are those studies made by others for their own purposes. The secondary data for my research would be collected from the companies own data, archives and their annual financial reports. Also the findings of prior research studies on outsourcing of accounting processes would give an ample amount of historical data or decision making patterns. Also I would use internet to get some more information about the industry and use journals for getting guidance from the past researches in this topic.

DATA COLLECTION METHOD

The data collection mode used to get the desired information from primary sources & Unstructured Direct Interviews &the instruments used in the Questionnaire. In this research data was collected through two different modes, namely-

Primary data collection Secondary data collection

Primary data collection: Primary data was collected through Questionnaire Surveys and direct
interviews.

Secondary Data Collection: Secondary data was collected from old reports and magazines and data
provided by company itself.

Data Analysis

SWOT ANALYSIS
In order to get clear understanding of the position of Diet Pepsi in the various markets we did a SWOT analysis from the data obtained from the survey and the various retailer interviews

STRENGTHS:
PACKAGING AND PRICING Pepsi has the advantage of having provided the same kind of health
based carbonated drink the Slim Diet Pepsi Can which in comparison to the Diet coke is a much more attractive offering because it is slim sleek equally healthy and way cheaper.

DISTRIBUTION As already mentioned Pepsi India has one strongest and most efficient sales and
distribution networks not only in India but also throughout the globe. Also in the particular market where the survey was done the sales people have developed a network which is powerful enough to make or break sales for Pepsi in any given quarter

P R One of the most important factors of success of PepsiCo in India is the relationship the company and its constituents have with the channel partners. The Company officials and even the employees of FOBO have very good rapport and relations with the Channel partners. Also the recently introduced retailer benefit schemes such as the gold card membership and other free gifts and offerings not only motivate the retailers but also helped us create visibility for the Slim Diet Can range in a profound. The experience of working with people who welcome us with a smile rather than a frown will always be remembered.

NON-CARBONATED This is one those strengths of Pepsi that often goes unnoticed but plays a very
important role in success of Pepsi in India and even around the globe. The non-carbonated segment is dominated by Pepsi, Tropicana is the market leader in fruit juices. In the mineral water segment, Aquafina clearly outsells Kinley without ay fuss.

Bottling Pepsi has the advantage of being in partnership with the largest bottler in India, the R K
Jaipuria Group. RKJ Group controls almost 65% of the bottling operations of PepsiCo in India. At times this is also seen as a weakness of Pepsi in India attributing to the fact that the Jaipuria group is so strong that in certain circumstances it can even defy the parent Company.

Pepsi Pepsi Cola is the biggest strength of Pepsi as it is the market leader in the Cola segment and
clearly outsells both the products the Coca Cola Company namely Coke and Thums Up. Pepsi controls almost 60% market share in the Cola segment.

WEAKNESS: SECOND MOVER DISADVANTAGE - Diet Pepsi Cola does have the first mover advantage which
Diet Coke has and this may prove to be a major shortcoming also in the Agra Market no Extensive efforts have been made to popularize it. Brand On a comparative scale Diet Coke proves to have a better brand image in customers mind than. This compels to incur extra expenditure in Advertising, Promotions and Sponsorship.

MCDONALDS This is one of the most important reason why Diet Coke outsells Pepsi worldwide
and specially in the United States. Similarly, in India Diet Pepsi may suffers in sales because of institutional sales. Now Pepsi is trying very to bridge this gap in the near future.

EXPENDITURE Right from the very beginning Pepsi has hired the biggest and the most expensive
stars in the country as its brand ambassadors and has spend heavily on advertising which has affected its balance sheet.

Vizicoolers At presently this is one the biggest problems faced by Pepsi. Pepsi is not able to get
refrigerators in India so they have to import it other namely Sri Lanka, Mauritius etc. Because of this, retailers are facing lot of problems in vigicoolers. They are not able to get new refrigerators, replacements for old ones, even the repair work takes lot of time because at times even the spares are not available on time.

OPPORTUNITIES:
Lowest Per Capita Consumption Even after almost decades of presence in the market, there are growth opportunities for Diet Pepsi in India as here the per capita consumption of carbonated beverages is one of the lowest in the world.

Health Based: apart from its Juice Based drinks portfolio Pepsi can Use the Slim Diet can to the
maximum by promoting it as a health drink at Cheaper prices.

THREATS:
NGOs NGOs like CSE can seriously hamper the sales and prospects of companies operating in this industry. This happened during the pesticide controversy involving both coke and Pepsi.

HEALTH Growing health awareness among people and some of ill effects of carbonated beverages have pursued many people to switch over to non-carbonated beverages that can seriously hamper the long-term prospects of the entire Industry and not Pepsi.

ENVIRONMENT Environmental concerns are often raised because of the massive amount of water extracted by the bottling plants resulting in the drop in groundwater level which affects the local population adversely.

In India PepsiCo adopted the strategy of growth through intensification. In the intensification strategy, it used market penetration by developing one of the strongest sales and distribution network in the world and utilizing it to the fullest.

Pepsi did market development by making the aware of the best products available at their disposal, by using the best technology to produce the products, by properly communicating with the customer, and making the customer realize that he is important. Pepsi also explored new markets by venturing new segments like fruit based beverages, sports drinks, snack food division.

Pepsi expanded and established itself in the market place by constantly developing new products to the customers, like Tropicana, Gatorade, and Pepsi Blue. In this way, Pepsi was also able to effectively counter the threats posed by substitutes and new entrant

DATA INTERPRETATION

Presentation of Data
Share of pepsico and coca-cola in soft drinks inGorakhpur.

Pepsico - 55%

Coca-cola 44%

Others 1%

Pepsico coca coala others

Reason to sell only pepsico or coca-cola soft drinks

Not supply -30%

Company refrigerator -40%

Space problem -20%

Others -10%

Not supply Company refrigerator Space problem Others

Retailer selling PET / RGB

Both -90% Only PET /RGB -10%

Retailer selling PET/RGB Both Only PET/RGB

Retailer chill the drinks by

Pepsico refrigerator -50% Coca-cola refrigerator -30% Personal refrigerator -20%

Pepsico refrigerator Coca cola refrigerator Personal refrigerator

Retailer get service delivered by

Company -10%

Distributor -70%

Wholeseller -28%

Retailer -2%

Company Distributor Wholeseller Retailer

FINDING

FINDING
The pepsico and coca-cola has covered 100% market of Gorakhpur. 1. The pepsico covers 55% market share in soft drink 2. The coca-cola covers 45% market share in soft drink 3. In black drink with pepsico brand pepsi has covered more market share in comparison to coca-cola brands 4. In lemon flavor coca-cola brand limca has monopoly 5. In mango flavor the share of maza and slice are approximately equal 6. The 40% retailers uses coca-cola refrigerator to chill drinks 7. The 60% retailers uses pepsico refrigerator to chill drinks 8. The 10% retailers uses personal refrigerator to chill drinks 9. In 60% market the supply of coca-cola is good 10.In 70% market the supply of pepsico is good 11.Retailers are interested to sell pepsico brands because of good

scheme 12.The small retailers do not get proper scheme 13.There are some restaurants and dhabas which are interested to sell softdrinks but company has not approach 14.Because of his space 20% retailers cannot take both companies brands 15.The some small retailers sell is more in comparison to big retailers.

CONCLUSION

CONCLUSION
After analyzing all the aspects of the data available and giving some important recommendations a suitable conclusion which should be derived for this study. However, before starting the conclusion part, the objective of the research must be kept in mind so that we can arrive at a befitting conclusion for the research problem.

The primary objective of this research was to develop a complete understanding of the overall functioning of PepsiCo India including the sales and distribution network and marketing (Partner Relationship Management to be precise).

The data collected provided a sound base for understanding the overall organizational set up of PepsiCo in India. By analyzing the data and the literature review, following conclusion was inferred:

The Sales and Distribution Network of Pepsi is very strong and almost flawless.

PepsiCo India had the first mover advantage when it entered the market and it capitalized on that advantage to grab the market.

Franchisee based operations combined with the Companys operations add strength to the overall presence of the Company in the market.

Franchisee takes care of its operations and PepsiCo does not interfere in its operations. The Franchisees are required to report to the Company at specific time intervals.

The Advertising Campaigns are conceived, implemented by the PepsiCo and Franchisee has no say in that.

Promotional activities within every territory are under the territory office and the officials of that office are responsible for the effectiveness and successful implementation of these campaigns.

Because of fierce competition PepsiCo has spend heavily on Ads in order to increase the brand recall and successfully face the competition.

Pepsi has good brand image and recall in the customers mind but the most surprising thing is that when compared with Coke, Pepsi lags behind in terms of brand image.

Although the overall functioning of Pepsi is very efficient, there are certain areas that can be improved.

PepsiCo is finding it difficult to counter the competition from Coke in carbonated Beverages Segment but it has distinct advantage and upper in almost all the other segments like snack food, non carbonated beverages, sorts drink, restaurants etc.

Diet Pepsi even though newly introduced hasnt yet caught up with Diet Coke the way it should.

SUGGESTION

SUGGESTION

This is one of the most important and most difficult part of the study.

I arrived at certain

recommendations for PepsiCo India(Trans-Yamuna and Agra markets) after the analysis of the data. Some of the important recommendations are as follows

There should be and correct feedback from the retailers on the performance of salesmen. This will help improve their efficiency and accountability. Moreover, this will also help in reducing the confusing that the retailers have at times because the salesmen does not explain the schemes properly.

As already mentioned Vizicoolers are a major reason of dissatisfaction among retailers. The periodical maintenance check of Vizicoolers is done at three months. This should be done at an interval of 45 days or 60 days instead of the current practice of 90 days

A complete survey of the every territory should be done for standys, banners logo racks etc. and then a proper budget and plan should be made for their availability at the required places, instead of doing it in bits and pieces as the current practice is this will help with promotion at every retailer level

There should be incentives for salesmen for every display they enroll because they are assigned this task and if they get incentives for the same then it will greatly increase the efficiency of the promotional activities.

Pepsi should also introduce a version of Diet Pepsi Cola as a sports drink range this is a completely new and untapped market which will help in providing the impetus for Diet Pepsi

Pepsi should start more aggressive marketing of its Diet Pepsi range of products as they have very good growth and future prospects while there is not much growth in the carbonated beverages sector.

In order to respond effectively to changing market trends and challenges, soft drink companies must support their improvement efforts with industry-specific solutions. These solutions should have the following characteristics and provide the following capabilities:

Basic processes
Pre-configured processes with clearly defined implementation scope A streamlined implementation strategy is necessary to minimize disruptions to the business while maximizing enterprise-wide adoption. When a world-class solution tailored to the specific needs of the soft drink industry is coupled with a rapid implementation approach, it can deliver immediate business value, generating a high overall return on investment and a low total cost of ownership.

Manage financials including cost management

An effective solution must provide an

integrated finance system capable of handling cost management, meeting internal and external reporting requirements, providing real-time data access, and drilling-down to greater levels of detail.

Manage procurement process

Necessary capabilities for efficient procurement include

supporting vendor price comparisons and flexible pricing processes for the actual value of the raw ingredients. It should also support quotation handling, contract management, and batch handling.

Meet customer expectations for managing Their Orders An effective solution should
be able to effectively manage the entire process for handling customers orders, encompassing variable

pricing, delivery, invoicing and payment. It should support beverage companies in shortening order cycle times, making on-time and in-full deliveries, and providing optimal payment methods for customers.

Optimize planning and manufacturing to suit specific business requirements

perform automatic batch determination based on expiration date during production-order processing.

Solutions in this arena should support a multi-step manufacturing process. This includes the ability to

Provide efficiencies in integrated inventory management

Integrated inventory

management capabilities are crucial. The system should be able to automatically update all stock figures after material movements have been posted. These figures should be accessible in real-time for decision support.

Manage product safety As food safety requirements become more advanced across the beverage
industry, track and trace capabilities are a prerequisite. An effective solution should have the functionality to find a defective batch that has already been delivered to a customer. Beverage-specific processes

Plan deliveries Effective solutions feature powerful tools that businesses can use to efficiently load,
dispatch, and track any number of deliveries. An emphasis should be placed on eliminating redundant trips and matching the appropriate vehicles and drivers to customers for each delivery. By extending route management into the order management system, companies could reap potential cost savings of 25% to 50%.

Monitor route business Beverage companies must be able to account for every item delivered,
and take quick action to resolve item discrepancies. Best-in-class solutions provide powerful check-in and check-out functions that record all deliveries and returned goods.

They should also provide tools to monitor quickly and accurately the entire transportation operation, or that of a transportation supplier, from loading and delivery to accounting and settlement of returned goods. The system as a whole should ensure complete loads, on-time deliveries, solid inventory control, and seamless invoicing.

Keep track of empties Best-of-breed beverage industry solutions paint a detailed picture of the
entire empties situation, showing the location and status of crates, kegs, or pallets, and helping optimize return logistics. It should also permit quick access of each customers empties account as well as print delivery notes or invoices recording the empties involved in a delivery.

Manage rebates and bonus agreements Rebate and bonus agreements are critical to
enhancing relationships among beverage manufacturers, wholesalers and customers. Yet, the task of managing rebate programs is becoming increasingly difficult as current rebate arrangements often involve numerous parties, including many that are not directly involved in the initial transactions. Effective beverage solutions provide companies with the tools needed to manage easily and accurately large, complex partner constellations with any number of bonus or rebate arrangements. They should also provide coupon management. These functions apply both to direct and indirect customers.

Manage commissions In the beverage industry, complex commission structures are needed to
motivate the sales force and to encourage them to push certain brands and to develop specific markets. Best-in-class solutions allow companies to complete commission based transactions, make payments both to internal and external sales forces, and track the payment of these commissions over time.

LIMITATION

LIMITATION
Some of the respondent were not co-operative and many seem to be having no interest. The study has not been intended on a very large scale, have the possibility of errors, which cannot be ruled out. Time limitations. Area was specified. It is extremely difficult to persuade retailer to respond to questionnaire. The retailer knows us as people from pepsi there by the responses could have been biased. The company does not provide any financial assistance.

 The time allowed for the project was short. It was impossible to study deeply in that short period.

ANNEXURE

Questionnaire
Which brand of soft drinks do you sell ? a) pepsico b) coca-cola c) both

d) other 2- what is the reason to sell only pepsico/coca-cola soft drinks ? a) no supply b) you are not interested to sell c) customer do not demand d) other 3- Do you sell PET or RBG ? a) only RBG b) only PET c) both 4- Which product sell in black drinks ?

a}Pepsi b) Thumps up c) Coke d) Coca-cola

5- which product do you sell in lemon flavour ? a) limca

b) nimbu of pepsico c) mountain dew d) others 6- Which product do you sell in mango flavour ? a) maza b) slice c) fanta d) frooti e) others 7- Which way you chill drinks ? a) Pepsico refrigerator b) coca-cola refrigerator c) other 8- Which company provides you better scheme ? a) PepsiCo b) coca-cola c) both d) None 9- What is the share of PepsiCo and Coca-cola in soft drinks in sale ? a) PepsiCo b) Coca-cola

10- Who delivers the service ? PepsiCo Coca-cola a) Company b) Distributor c) Wholeseller d) Retailer 11- What is the supply condition ? Pepsico Coca-cola a) proper supply b) Irregular supply c) No supply 12- Any remark about pepsico company ? ----------------------------------------------------------------------------------------------------------------------------

BIBLIOGRAPHY

BIBLIOGRAPHY
PHILIP KOTLER, 12TH EDITION.

PEPSICO INTERNATIONAL OFFICIAL WEBSITE,

PEPSICO INDIA WEBSITE.

PEPSICO INTERNATIONAL INTERNAL REPORT.

SUMMARY
The title of study of market analysis and straegy of pepsico and coca-cola in soft drink at Gorakhpur. To find the share of pepsico and coca-cola in soft drink To study the preference of people for soft drinks To determine the target market for soft drinks To identify the base to increase the market share of pepsico in soft drinks

To identify the impact of sales on distribution It has been find that the share of pepsico is 55% coca-cola 44% and other 1% In soft drinks at Gorakhpur market the only 10% customers are brand preference other wants only chilled drinks in black drinks pepsico brand pepsi has good market share on the other hand lemon flavor limca has monopoly in the market and in mango flavor maza (coca-cola) and slice are doing well The some of the causes of low market share at Gorakhpur. Not proper supply in some markets No proper supervision by supervisors To a relation with retailers in some market Mostly small retailers do not get scheme Company do not provide refrigerator to the retailers in comparison to coca-cola. Limca brand of coca-cola has monopoly in the market Some suggestion to improve the market share of pepsico Equal weightages is given to small and big retailers because some times small retailer sales more in comparison to big retailers The scheme must be reach to retailers Pepsico company should make flexible policy to provide refrigerator to

retailers Some restaurants and dhabas are interested to sale cold drinks so company should approach as soon as possible The company should launch 300ml PET so that retailers can easily sell it otherwise they prefer so sell the local brands like RC cola and City cola The price should be divisible by 5. By this retailer gets convenient to sale the product