A

A capstone
capstone project
project presentation
presentation
on
on
A competitive comparison of Soft drink industry in
India in context of PepsiCo and Coca cola ent.inc.

Prepared by: Akshaykumar Jadav(34) Project guide: Prof.Gincy Methew

S.K. PATEL INSTITUTE OF MANAGEMENT & COMPUTER STUDIES

Sector: 23, GH-6 Road corner, Gandhinagar-382 023
Phone: 079- 23245729 fax: 079-23248119
Website: www.skpatel.org, E-mail:skpinfo@skpatel.org
 Flow of the presentation
• Introduction
– Industry
– Company
• Pepsi
• Cocacola
• Research objective
• Research questions
• Research methodology
• Industry analysis
• Company analysis
• Retailers analysis
• Distributors analysis
• Comparative study of channel
• Conclusion
• Bibliography
 FMCG INDUSTRY
OVERVIEW
• The FMCG sector represents consumer goods required for
daily or frequent use. The main segments of this sector are
personal care (oral care, hair care, soaps, cosmetics, and
toiletries), household care (fabric wash and household
cleaners), branded and packaged food, beverages (health
beverages, soft drinks, staples, cereals, dairy products,
chocolates, bakery products).
• The Indian FMCG sector is an important contributor to the
country's GDP.
• This industry has witnessed strong growth in the past
decade.
• Unlike the perception that the FMCG sector is a producer
of luxury items targeted at the elite, in reality, the sector
meets the every day needs of the masses.
 Company overview-Pepsi
• PepsiCo, Inc. was founded in 1965
• Tropicana was acquired in 1998.
• In 2001, PepsiCo merged with the Quaker Oats
Company, creating the world’s fifth-largest food
and beverage company, with 15 brands – each
generating more than $1 billion in annual retail
sales. PepsiCo’s success is the result of superior
products, high standards of performance,
distinctive competitive strategies and the high
level of integrity of our people.
 Company overview-
cocacola
• Coca-Cola originated as a soda fountain
beverage in 1886 selling for five cents a
glass.
• Early growth was impressive, but it was
only when a strong bottling system
developed that Coca-Cola became the
world-famous brand it is today.
 Research objective
• The main objective of the project
report is to compare the distribution
channel of both companies pepsico
and cocacola and find out which
channel is competitive
 Research questions
• To find out which channel is better.
• To survey the retailers and find out of which
companies retailers are satisfied with the
company.
• To survey distributors and find out which
company’s distributors are more satisfied with
company.
• To understand channel of both companies
• If needed ,give suggestions for the betterment
of the channel
 Research methodology
• Universe of the study: Ahmadabad
City
– Sample Size - 50
– Sampling method - convenience sampling

• Data collection -
– Primary Data - Retailers+distributors(50),

Secondary Data - Internet, News Papers

and Journals
Industry analysis-P5F
 Industry analysis-P5F
• Rivalry among competing firms:
– In the Fmcg industry rivalry among competitors
is fierce.
– There are scarce customers because industry is
highly saturated and the competitors try to
snach their share of market
– Market players use all sort of tacticts and
activities from intensive advertisement
campaigns to promotional stuff and price war
etc.
– Hence ,the intensity of rivalry is high.
 Industry analysis-P5F
• Potential entrant of new competitors:
– Fmcg industry can does not have any measures
which can control the entry of new firms.
– The resistance is very low and the stucture of
the industry is so complex that new firms can
easily enter and also offer tough competition
due to cost effectiveness
– Hence,potential entry of new firms is highly
viable
 Industry analysis-P5F
• Potential development of substitute product:
– There are complex and never ending needs and no firm
can satisfy all sorts of needs alone .
– There are plenty of substitute goods available in the
market that can be replaced if consumers are not
satisfied with one.
– The wide range of choices and needs give a sufficient
room for new product development that can replace
existing goods.
– Every other day there is some sort of new product
variants and designs .
– This leads to h igher consumer expectation.
 Industry analysis-P5F
• Bargaining power of consumer:
– Bargaining power of consumer is also very high.
– This is because in fmcg industry the swithching
cost of most of the goods is very low and there
is no threat of buying one product over other .
– Customers are never reluctant to buy or try
new things.
 Industry analysis-P5F
• Bargaining power of suppliers:
– The bargaining power of supplier of raw
material and intermediate goods is not very
high.
– There is ample number of substitute suppliers
available and the raw material are also readily
available and most of the raw materials are
homogenous.
– There is no monopoly situation in the supplier
side because the suppliers are also competing
among them selves.
 Company analysis-swot
• Pepsi –strengths
– Strong core brand
– Strong market position
– Solid brand portfolio
– Strong revenue growth
– Economies of scale
– Filtered Water instead of Spring Water makes
the production,logistics, and profit margins a
lot greater on their bottled water sales.
 Company analysis-swot
• Pepsi-weakness
– Concentrated in North America (US,
Canada, Mexico), where almost 70% of
revenues come from
– Health Craze will hurt soft drink sales.

 -Unhealthy snacks
 Company analysis-swot
• Pepsi –opportunities
– Acquisitions & alliances
– Bottled water growth
– Hispanic growth in the US and Pepsi's ability to meet
their tastes with current product lines (i.e., Sabritas
chips)
– Growth in emerging markets
– Growing consumer health consciousness - i.e., consumer
focus on non-carbonated beverages like Gatorade,
Aquafina, Litpon, Quaker Oats, etc
 Company analysis-swot
• Pepsi-threat
– Declining economy/recession
– Sluggish growth of carbonated drinks
– Coca-Cola & other smaller, more nimble
operators
– Commodity price increases, fluctuating
oil prices effect production and
distribution (gas, plastic)
 Company analysis-swot
• Cocacola-strength
– Brand equity/image & recognition
– Product distribution and worldwide network
– Solid financial performance
– One of the world's most recognized brand
– Product diversification (water, juices, soft drinks, sport
drinks, etc)
– Combining with fast food retailers to increase market equity.
– Coca Cola business system, it allows it to conduct business on a
– Global scale while maintain a local approach.
– Brand loyalty
– New Technology
•
 Company analysis-swot
• Cocacola-weakness
– Credit rating
 [*] Customer concentration, particularly
in the US (Wal-Mart, for example,
accounts for more than 10% of Coca
Cola's business in the US)
 Company analysis-swot
• Cocacola-opportunities
– New products
– Bottled water growth
– Acquisitions of smaller players
– Health consciousness growth, specially of baby
boomers
– Growing US Hispanic Population who are loyal
to the brand & consume more soda per capita
 Company analysis-swot
• Cocacola-threats
– Commodity prices growth
– Image perception in certain parts of the world
(i.e., Colombia)
– Smaller, more nimble operators/players
– Key competitors (Pepsi, etc)
– Inefficient and outdated distribution model
with franchised bottling companies
 Retailers analysis
1) What do you sell?

chart 1

pepsi
pepsi 20
44%
cocacola cocacola 25
56%

pepsi cocacola
2)do you get cold drink in time?

chart 2

2, 4%

Yes 43

43, 96%

No 2
Yes No
3)when do distributor come to your shop to give
delivery?

chart 3

Every day 0
35
30
everyweek 12
25

respondents
20
Every
15
10
month 33
5
0
Every day everyweek Every month
order timing
 4)when do you pay money for delivery?

CHART 4

0
At
After one week
delive
ry 44
TIM ING

1
Next day

Next day 1
44
At delivery

0 10 20 30 40 50
After one
RESPONDENTS week 0
5)how do you inform your order to distributor?

CHART 5

By telephone 2
3 On the day’s
MODE OF ORDER

Other please specify delivery time 40

2
On the day’s delivery time
Other please specify 3
By telephone
1

0 10 20 30 40
RESPONDENTS
6) Do you get delivery as per order?

CHART 6

45

Yes 45 No 0
0

Yes No
7) Does your distributor give information
about schemes?

CHART 7

1, 2%
Yes 44
44, 98%

No 1
Yes No
8)do you know any kind of sceame given to you?

CHART 8

Yes 45

No 0
45

Yes No
9)what kind of facility do you have to store colddrink?

CHART 9

45
45
40
35 Friedge 45
RESPONDENT

30
25
20
15
ice-box 0
10
5
0
Friedge
0

ice-box
0

anyother
anyother 0
FACILITY
10)does company provide any advertisement material
like umbrellas ,cap etc.?

CHART 10

Yes 45

No 0
45

Yes No
12)if yes do you satisfied with given material?

CHART 11

6, 13%

Yes Yes 39
No

39, 87%

No 6
14)which brand do you think better ,why?

CHART 13

cocacola 25
pepsi, 20, 44% cocacola
cocacola, 25,
pepsi
56%

pepsi 20
 15) are you satisfied with the distributors in terms of provided
point of purchase assessment ?

CHART 14 Verymuch
satisfied 35

Very much dissatisfied

0 Much
3 satis
Not much satisfied
fied 5
SATISFACTION

2
Satisfied

Much satisfied
5 Satisfie
Verymuch satisfied
35 d 2

0 5 10 15 20 25 30 35 Not much
RESPONDENT satisfied 3
Very much
dissatisfied 0
 Distributors analysis
1)what do you sell?

chart 1

0%

40%
Pepsi
Pepsi 2
Cocacola
Both Cocacola 3
60%

Both 0
 2)since how many years are you in distribution?

chart 2

3
3
2.5
0 to 1 0
2

respondents 1.5 1 to 3 1
1 1
1 Series1
3to 5 3
0.5
0
0 more than 5 1
0 to 1 1 to 3 3to 5 more than
5
years
3)How much quantity do you purchase?
100 to
200
chart 3 crate
s 0
3
200 to
2.5 400
2 crate
s 1
respondents

1.5
400 to
1
500c
0.5 rates 1
0 More
100 to 200 200 to 400 400 to More than
crates crates 500crates 500crates than
500c
rates 3
4)what is your order cycle?

chart 4

Everyweek 1

Every month 0
0, 0%
Others___________ 2days,alterna
Company _______ tedays,
You

5, 100%
5)who manages your inventory ?

chart 5
Compan
No
y 0
0%

You 5
Yes
No
Others__________________
_____
Yes
100%
6)do you get inventory in good condition?

chart 6

0, 0% Yes 5

Yes
No No 0

5, 100%
7)do companies marketing personnel helps to solve problem
regarding inventory ?
chart 6

0, 0%
Yes 5
Yes
No

5, 100%
No 0
 8)what do you provide retailers as point of purchase
assessment?
chart 7

4
Umbrella 4
4
3.5
3
Tent 0
3
2.5 Holdings 2
respondents

2
2
1.5
1
Series1
Paintings 3
0.5
0
0 Others______________
Umbrella Tent Holdings
material
Paintings
____
 9)what do you provide retailers as point of purchase
assessment?

chart 7

4 4
Umbrella 4
4
3.5
3 3 3
Tent 0
2.5
Holdings 2
respondents

2 2 2

Paintings
1.5 Series1
1 3
0.5
0
0 0 Others______________
Umbrella Tent
material ____
10)Do you know any scheme given to you?

chart 8

0%
Yes 5
Yes
No

No 0
100%
11)how do you to come to know about schemes?

from company,
company's
marketing
personnel .
COMPARATIVE STUDY
OF DISTRIBUTION
CHANNEL
• We can comprare both distribution
channel by clicking the distribution
route and distribution system.
• Distribution Department: It appoints
distributors and establishes a distribution
network, processes approved sale orders and
prepares invoices, arranges logistics and ship
products, co-ordinates with distributors for
collections and monitors distribution stocks and
their set-up. Pepsi is having more retailers than
cocacola but it has lesser sales than cocacola
because of the brand image of more stronger
soda (thumps up) how ever it tastes more spicy
than pepsi.
• Finance Department:
• It checks credit limits and approves sales
orders in compliance with the credit policy
followed by the firm, records collections
from distributors, Coca-Cola periodically
reconciles outstanding balances from
distributors, obtains balance confirmation
from distributors and follows up
outstanding balances.
• Shipping or Warehousing Department:
• It dispatches goods as per approved by
order, ensures that stocks are dispatched
on a FIFO basis, ensures physical control
over load out area and updates warehouse
stock records in a timely manner.
 DISTRIBUTION
ROUTES
• The various routes formulated for distribution of products
are as follows:
• Key Accounts: The customers in this category collectively
contribute a large chunk of the total sales of the Company.
It basically consists of organizations that buy large
quantities of a product in one single transaction. The survey
shows that cocacola is having more number of sales than
pepsi. The Coccola provides goods to these customers on
credit, payments being made by them after a certain period
of time i.e. either a month of half a month.
• Examples: Clubs, fine dine restaurants, hotels, Corporate
houses etc.
• Future Consumption: This route consists of outlets of Coca-
Cola products, wherein a considerable amount of stock is
kept in order to use for future consumption. The stock does
not exhaust within a day or two, instead as and when
required stocks are stacked up by them so as to avoid
shortage or non-availability of the product.comapring with
pepsi as mentioned erlier it has not more sales than
cocacola and the view of future consumption also plays
major role for selling.

• Examples: Departmental stores, Super markets etc.

• Immediate Consumption: The outlets in this route are
those which require stocks on a daily basis. The stocks of
products in these outlets are not stored for future use
instead, are exhausted on the same day and might run a
little into the next day i.e. the products are consumed at a
fast pace.pepsi is using this strategy for the selling of its
products
• Examples: Small sized bars and restaurants, educational
institutions etc.
• General: Under this route, all the outlets that come in a
particular area or an area along with its neighboring areas
are catered to. The consumption period is not taken into
consideration in this particular route.
 DISTRIBUTION
SYSTEM
• Direct distribution:
In direct distribution, the bottling unit or
the bottler partner has direct control over
the activities of sales, delivery, and
merchandising and local account
management at the store level.cocacola is
having more bottaling units than pepsi it
has advantage to cocacola for direct
distribution
• Indirect distribution:
In indirect distribution,an organization
which is not part ofcompany. the
Coca-Cola system has control on one
or more of the distribution elements
(Sales, delivery, merchandising and
local account management).
• Merchandising:
• Merchandising means communication with
the consumer at the point of purchase to
convey product benefit, value and Quality.
Pepsi provides more point of purchase to
its retailers, Sales people and delivery
personnel both have this responsibility. In
certain locations special teams who go into
business locations to specifically
merchandise Pepsi’s products.
 Conclusion:
Retailers’
• From the survey we can conclude that cocacola is having edge over pepsi, in
forms of not only distribution but also in product differentiation.
• there has been more sell of cocacola seen in survey it is about 56% and
pepsi is having that 44% from the survey we can assurely conclude that
cocacola is having more sells than pepsi.
• Only 2 retailers were not getting the order in time from that generally all
the retailers book their order every month because of summer the
retailers book more orders on monthly basis. Retailers pay their money at
the delivery time only 1 respondent has said that he was paying the money
• only one retailers was such who did not know the scemes of the company
.otherwise all other respondent know about the schemes.
• company provides many facility to store the soft drinks like fridge.pepsi
provides more point of purchase material to retailers and 87% of the
retailers are satisfied with given material. Company has adopted plastic
cover packaging so there is no problem of broken bottles because of
clash.at last retailers are getting the delivery from distributors in time
.retailers like cocacola brand more than pepsi.
 Distributors:
• Out of 5 distributors 2 sell pepsi and 3 sell cocacola .we can
conclude that market of distribution is increasing the sell is going
up every day.
• distributiors sell above 400-500 crates. For the order the cycle is
more alternative.
• delivered order is managed by the distributors themselves.
Because of having good delivery there is no question to solve the
problem regarding inventory.
• To manage inventory distributors use latest software like redix
some of the distributors .as mentioned in retailers conclusion
distributors provide umbrellas,tent,hordings and painting to the
retailers as per their need. All the distributors know the schemes
given to them.
 Bibliography
• www.authorstream.com
• www.cocacola.com
• www.pepsico.com
• www.docstoc.com
• www.scribd.com
• http://www.agriculture-industry-india.com/agricultural-commodities/soft-drinks.html
• http://www.slideshare.net/rajsinghprofessional/cocacola-in-rural-india
• http://inventors.about.com/library/inventors/blpepsi.htm
• http://www.indiabschools.com/marketing_018.htm
• http://www.sirpepsi.com/pepsi11.htm
• http://swiftwaterlogistics.com
• Philip Kotler, Kelvin Lane Keller, Abraham Koshay and Mithileshwar Jha, “
• MARKETING MANAGEMENT”
• 2. David L. Loudon and Albert J. Della Bitta, “ CONSUMER BEHAVIOUR,” 4TH
Edition
• TATA McGraw-HILL