A

PROJECT REPORT ON

A STUDY ON BEVERAGE INDUSTRY

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR
MASTER OF BUSINESS ADMINISTRATION (MBA)
TO
DEPARTMENT OF BUSINESS & INDUSTRIAL MANAGEMENT,
VNSGU

BY
RONIK PASSWALA
ACHAL PATEL
GHATA SHIROYA

UNDER THE GUIDANCE OF

DR. MANISHA PANWALA

DEPARTMENT OF BUSINESS & INDUSTRIAL MANAGEMENT

VNSGU, Surat.
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EXECUTIVE SUMMARY
The soft drinks market in the advanced economies like the US is saturated or in some cases
declining sales (Reuters). Given a fast growth rate of the Indian GDP, and consequently, higher
levels of income distribution in the population, Pepsi is increasingly turning to emerging
economies like India to sustain its global growth (Wikinvest).
The Indian packaged food market is huge with the packaged tea and biscuit segments on top.
Although soft drinks constitute the third largest segment, compared to other developing
countries the market penetration is still very low. This indicates a further potential for rapid
growth. It is a telling point that the average per capita consumption of soft drinks in the US is
700 bottles per capita / year, while in India it is only 10 bottles a year; the rural areas with an
estimated 700 million people accounting for only 4 bottles per capita / year.
According to a report by Euromonitor International, soft drinks in India have been estimated
to have a market of 3.108 million US $. Soft drink volume sales are expected to rise by 8.6%
per year. The sales of bottled water are also expected to rise rapidly in the next five years with
an annual growth rate of 16.5%. Growing health awareness and increasing demand for hygienic
products will fuel the dynamic growth of juices by an annual rate of almost 22%. Penetration
in rural markets will also contribute to sales increase in soft drinks. (Euromonitor International
2011).
India is a unique market for Pepsi in that, it is one of the few markets, where Pepsi outsells
Coke, however 2 of Coca Colas products hold the top 3 spots in terms of market share, so
Pepsi does have an opportunity to increase its market share. Its biggest competitor is a home
grown brand called Thums Up which had been acquired by Coca-Cola when it entered India in
2003. Pepsi which has true to its global image always been seen as a young, trendy brand,
however after a spurt of creative marketing in the late 90s, early 2000s which boosted the
Pepsi brand immeasurably, it has for some time been using generic global marketing campaigns
which have not struck a chord with the young in India, and neither has it attempted to tap into
the family, feel good segment which has been Coca-Colas consistent strategy.
Pepsi has a lot of inherent brand equity in the Indian market, which while has been dented by
the Pesticide controversy in 2003 & 2006 has still not hampered its growth in the India. If Pepsi
can capitalise on this and build on it, it can create a legion of loyal customers which can sustain
the revenues potentially lost in other saturated markets.
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TABLE OF CONTENTS
TOPIC

PAGE NO.

INTRODUCTION

SOFT DRINK INDUSTRY: AN OVERVIEW

COMPANY PROFILE- COCA COLA

DISTRIBUTION NETWORK

18

COKES MARKETING STRATEGIES

23

COCA COLA GLOBALIZATION STRATEGIES

23

COKES BOTTLING STRATEGIES

24

IMC TOOLS USED FOR COCA-COLA

28

RESEARCH METHODOLOGY

34

SWOT ANALYSIS

37

CONCLUSION

39

RECOMMENDATION

40

BIBLIOGRAPHY

41

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INTRODUCTION
In the modern urban culture consumption of soft drinks particularly among younger generation
has become very popular. Soft drinks in various flavors and tastes are widely patronized by
urban population at various occasions like dinner parties, marriages, social get together;
birthday calibration etc. children of all ages and groups are especially attracted by the mere
mention of the word soft drinks.
With the growing popularity of soft drinks, the technology of its production, preservation,
transportation and or marketing in the recent years has witnessed phenomenal changes.
The so-called competition for this product in the market is from different other brands. Mass
media, particularly the emergence of television, has contribute to a large extent of the ever
growing demand for soft drinks the attractive jingles and sport make the large audience
remember this product at all times.

It is expected that with the sort of mass advertising, reaching almost the entire country and
offering various varieties annual demand for the product is expected to rise sharply in the times
to come.
In any marketing situation, the behavioral / environmental variables relating to consumers,
competition and environment are constantly influenced. The competitors in a given industry
may be making many tactical exercises in market all the time. The may introduce or initiate an
aggressive promotion campaign or announce a price reduction. The marketing man of the firm
has to meet all these maneuver and care of competitive position of his firm and his brand in the
market. The only route open to him for achieving this is the manipulation of his marketing
tactics.
In todays highly competitive market place, three players have dominated the industry; The
New York based Pepsi Company Inc. The Atlanta based coca- cola and U.K. based Cadbury
Schweppes.

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SOFT DRINK INDUSTRY: AN OVERVIEW

The soft drink industry has been dominated by three major players:
(1) The New York based Pepsi co. Inc.
(2) The Atlanta based coca cola co.
(3) The United Kingdom based Cadbury Schweppes.
Though out the glove these major players have been battling it. Out for a bigger chunk of the
ever-growing cold drink market. Now this battle has begun in India too. India is now the part
of cold drink war. Gone are days of Ramesh Chauhan,

Indias one time cola king and his bouts of pistol shooting. Expect now to hear the boon of
cannons when the Coca Cola & Pepsi co. battle it out for, as the Jordon goes a bigger share of
throat. By buying over local competition, the two American Cola giants have cleared up the
arena and are packing all their power behind building the Indian franchisee of their globe
girdling brands. The huge amount invested in fracture has never been seen before. Both players
seen an enormous potential in his country where swigging a carbonated beverage is still
considered a treat, virtually a luxury.
In colas, Pepsi is already market leader and in certain cities like Delhi, Pepsi outlets are on one
side & all the other colas put together on the other. While coke executive scruff at Pepsis
claims as well as targets, industry observers are of the view that Pepsi has definitely stolen a
march over its competitor coke.
Apart from numbers, Pepsi has made qualitative gains. The foremost is its image. This image
turnaround is no small achievements, considering that since it was established in 1989, taking
the hardship route prior to liberalization and weighed down by export commitments.

Now, at present as there are three major players coke, Pepsi and Cadbury and there is stiff
competition between first two, both Pepsi and coke have started, sponsoring local events and
staging frequent consumer promotion campaigns. As the mega event of this century has started,

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and the marketers are using this event world cup football, cricket events and many more other
events.
The success of soft drink industry depends upon 4 major factors viz.
Availability
Visibility
Cooling
Range

AVAILABILITY
Availability means the presence of a particular brand at any outlet. If a product is now
available at any outlet and the competitor brand is available, the consumer will go for that.
VISIBILITY
Visibility is the presence felt, if any outlet has a particular brand of soft drink say- Pepsi cola
and this brand is not displayed in the outlet, then its availability is of no use. The soft drink
must be shown off properly and attractively so as to catch the attention of the consumer
immediately.
COOLING
As the soft drinks are consumed chilled so cooling them plays a vital role in boosting up the
sales. The brand, which is available chilled, gets more sales then the one which is not, even
if it is more preferred one.
RANGE
This is the last but not the least factor, which affects the sale of the products of a particular
company. Range availability means the availability of all SKU (Stock Keeping Units).

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HISTORY OF SOFT DRINK IN INDIA

India is a potentially one of the largest consumer market in the world. Soft drink is a typical
product, which quenches thirst and also used for refreshment. In old days people used to quench
their thirst by taking water, Jal jeera, Lassi, Sharbat, Ganna Juice etc. which still prevailing in
the market. But as the people require more advance and efficient drink, so there felt a need for
more sophisticated means of satisfying thirst, which ultimately gave to the production of
modern soft drink.
A soft drink is a non-alcoholic beverage. It is artificially flavoured drink, which contains no
fruit juice or pulp.
The soft drinks market till early 90s was in hands of domestic players like Campa, Thumps
Up, Limca etc. but with opening up of economy and coming of MNC players Pepsi and Coke
the market has come totally under their control. While worldwide Coke is the leader in
carbonated drinks market in India it is Pepsi which scores over Coke but this difference is fast
decreasing (Courtesy huge ad-spending by both the players). Pepsi entered Indian market in
1991, Coke re-entered (After they were thrown out in 1977, by the then central government) in
1993.
Pepsi has been targeting its products towards youth and it has struck right chord with
the market and the sales have been doing well by sticking to this youth bandwagon. Coke on
the other hand struggled initially in establishing itself in the market. In a span of 7 years of its
operations in the country, it changed its CEO four times but finally they seem to have
understanding the pulse of Indian consumers.

Introduction of soft drink in the name of COCA-COLA was first created in 1886 in USA. Dr.
John S. Perfector perfected the formula of Coca-Cola. The parle came up by introducing Gold
Spot in orange flavour. It was really challenging task for parle to position i.e. Gold Spot in the
market against Coca-Cola, because using foreign brands habituated people. So first of all, it
was launched in Bombay and free sampling was done in hotels, restaurant, offices and clubs to
make people aware about the taste and quality because it was quite different from Coca-Cola
in these two attribute.

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After a tedious effort of about 20 years, it succeeded in establishing its separate identity. Thus
Coca-Cola was the first foreign brand introduced in India during 1965 and the first Indian brand
soft drink was Gold Spot launch in the later part of 1940s.
During the rule of Janta Party at center in 1978, the Indian government cancelled collaboration
with USAs Coca-Cola company and as a result Coca-Cola winded up its operation in India.
Now Indian market was open for various cold drinks. Several companies came forward pushing
the different brands in the market. Parle introduced Thums Up. Pure drink of Delhi
introduced Campa-Cola along with Campa Orange and Campa-Cola.
In 1991, a multinational company globally known as P.C.I. (Pepsi Cola International) entered
the Indian market with the name P.F.L. (Pepsi Food Limited). Its president Christopher found
a large scope for their soft drink in India.
Both PFL and Parle were the two main bottlers in the soft drink arena. There was a cut throat
competition between them.1993, Coca-Cola re-entered into the Indian market and acquired five
brands of parle i.e. Thums Up, Limca, Citra, Maza and Gold-Spot. Thus in India, Coca-Cola
has become the close rival of Pepsi Foods Limited (PFL). They are fighting each other to gain
a clear edge over the other.
At present, Pepsi Foods Limited has 44 bottling plants while Coca-Cola has 62 bottling plants.
The total money invested by Pepsi Foods Ltd. is 500 million dollars while Coca-Cola has
invested 800 million dollars in India. The Indian soft drink market was growing at an
encouraging 16% per annum which augured well for both the companies.
Today India is one of the most potential markets, with population of around 900 million people.
Population and potential market are two major reasons for major multinational companies of
entering India. They feel that a huge population coupled with low consumption can only lead
to an increase in the soft drink market. Another increase in the sale of soft drinks in the
scorching heat and the climate of India, which is suitable for high sale of soft drinks. All these
factors together have contributed to a 30% growth in the soft drinks industry.

MARKET SHARE OF COCA COLA AND PEPSI IN THE MARKET:

In Present situation of Coca Cola is very good in the market. The company have good market
share app. 42% and remain 28% market share covered by his close competitor Pepsi in this
Area. [BEVERAGE-DIGESTS 2012 Report]

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COMPANY PROFILE- COCA COLA

Coca-Cola was first introduced by John Syth Pemberton, a pharmacist, in the year 1886 in
Atlanta, Georgia when he concocted caramel-colored syrup in a three-legged brass kettle in his
backyard. He first distributed the product by carrying it in a jug down the street to Jacobs
Pharmacy and customers bought the drink for five cents at the soda fountain. Carbonated water
was teamed with the new syrup, whether by accident or otherwise, producing a drink that was
proclaimed delicious and refreshing, a theme that continues to echo today wherever CocaCola is enjoyed.

Dr. Pembertons partner and book-keeper, Frank M. Robinson, suggested the name and penned
Coca-Cola in the unique flowing script that is famous worldwide even today. He suggested
that the two Cs would look well in advertising. The first newspaper ad for Coca-Cola soon
appeared in The Atlanta Journal, inviting thirsty citizens to try the new and popular soda
fountain drink. Hand-painted oil cloth signs reading Coca-Cola appeared on store awnings,
with the suggestions Drink added to inform passers-by that the new beverage was for soda
fountain refreshment.
By the year 1886, sales of Coca-Cola averaged nine drinks per day. The first year, Dr.
Pemberton sold 25 gallons of syrup, shipped in bright red wooden kegs. Red has been a

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distinctive colour associated with the soft drink ever since. For his efforts, Dr. Pemberton
grossed $50 and spent $73.96 on advertising. Dr. Pemberton never realized the potential of the
beverage he created. He gradually sold portions of his business to various partners and, just
prior to his death in 1888, sold his remaining interest in Coca-Cola to Asa G. Candler, an
entrepreneur from Atlanta. By the year 1891, Mr.Candler proceeded to buy additional rights
and acquire complete ownership and control of the Coca-Cola business. Within four years, his
merchandising flair had helped expand consumption of Coca-Cola to every state and territory
after which he liquidated his pharmaceutical business and focused his full attention on the soft
drink. With his brother, John S. Candler, John Pembertons former partner Frank Robinson and
two other associates, Mr.Candler formed a Georgia corporation named the Coca-Cola
Company. The trademark Coca-Cola, used in the marketplace since 1886, was registered in
the United States Patent Office on January 31, 1893.

The business continued to grow, and in 1894, the first syrup manufacturing plant outside
Atlanta was opened in Dallas, Texas. Others were opened in Chicago, Illinois, and Los
Angeles, California, the following year. In 1895, three years after The Coca-Cola Companys
incorporation, Mr. Candler announced in his annual report to share owners that Coca-Cola is
now drunk in every state and territory in the United States.

As demand for Coca-Cola increased, the Company quickly outgrew its facilities. A new
building erected in 1898 was the first headquarters building devoted exclusively to the
production of syrup and the management of the business. In the year 1919, the Coca-Cola
Company was sold to a group of investors for $25 million. Robert W. Woodruff became the
President of the Company in the year 1923 and his more than sixty years of leadership took the
business to unsurpassed heights of commercial success, making Coca-Cola one of the most
recognized and valued brands around the world.

BOTTLERS:
One of the main ways by which the Coca-Cola system throughout the world maintains a global
brand with a local approach is its Bottling system. Since the Coca-Cola Company has over
2,400 products spread over 200 countries, its bottling system has to be the best. Before any
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Coca-Cola product reaches the consumer in any part of the world, it is produced, sold and
distributed by a bottler from that region.
The Bottlers form the link between the brand and the customers and their services help the
product reach the customers. The bottlers are local companies which assist the business to get
an indigenous perspective which will help cater to its consumers in a far better way. Each
bottler maintains a different method to serve their respective regions in an appropriate way.

COCA-COLA INDIA
Coca-Cola India has made significant investments to build and continually improve its business
in India, including new production facilities, wastewater treatment plants, distribution systems
and marketing equipment. During the past decade, The Coca-Cola System has invested more
than US $1 billion in India, making Coca-Cola one of the countrys top international investors
and in 2003, Coca-Cola India pledged to invest a further $100 million in its operations.

The Coca-Cola System in India includes 24 Company-owned bottling operations and another
25 franchisee-owned bottling operations that directly employ 5,500 local people and create
jobs for another 150,000. The Coca-Cola Company and its independent bottlers have been
engaged at the international, national and community levels to support programs that protect
the environment, conserve water, promote education, and provide healthcare.

Company Mission
To refresh the world in body, mind and spirit, to inspire moments of optimism through our
brands and our actions, to create value and make a difference everywhere we engage.

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Company Values

Leadership: The courage to shape a better future

Passion: Committed in heart and mind
Integrity: Be real
Accountability: If it is to be, its up to me
Collaboration: Leverage collective genius
Innovation: Seek, imagine, create, delight
Quality: What we do, we do well

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PRODUCTS AT A GLANCE
COCA- COLA
The biggest-selling soft drink in history, and the best-known product in the world. It is
also considered as the Worlds most valuable brand. From a humble beginning in the
year 1886, it is now the flagship brand of the largest manufacturer, marketer and
distributor of non-alcoholic beverages in the world.
The word 'Coca-Cola' itself is even thought to be the second most widely understood
word in the world after OK!

DIET COKE
Introduced in the United States in 1982 and in Britain a year later, 'diet Coke' or Coca
Cola Light as its sometimes known - is now sold in 149 countries across the world,
with sales in Britain second only to those of the United States.

Whether diet or light, this is the soft drink for those who live life to the full and embrace a healthy
lifestyle, and it's deliciously sugar free.

THUMS UP
Thums Up is a leading sparkling soft drink and most trusted brand in India. Originally
introduced in 1977, Thums up was acquired by Coca Cola Company in 1993. It is
similar in flavour to other colas but has a unique taste reminiscent of betel nut and is
promoted as a masculine and a bold drink.

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SPRITE
First introduced in 1961, 'Sprite' is now the worlds leading lemon-lime flavoured
soft drink and the No. 4 soft drink worldwide, sold in 190 different countries! The
idea for the name came from Haddon Sundbloms Coca-Cola advertisements
featuring the little sprite an elf with silver hair and a big smile. Millions of
people around the world enjoy 'Sprite' for its crisp, clean taste.

FANTA
'Fanta' is the soft drink with the vibrant taste of real fruit flavours. 'Fanta' became
only the second drink - after 'Coca-Cola' itself - to be marketed by The Coca
Cola Company, but was soon available in many different countries. Originally
only orange flavoured, 'Fanta' is now produced in 70 different varieties
worldwide, with flavours often derived from the native fruits of the region where
it is being sold.
Coca Cola has recently launched the Fanta Apple Flavour.

LIMCA
Lime n lemoni Limca, the drink that can cast a tangy refreshing spell on
anyone, anywhere. Born in 1971, Limca has the original thirst choice, of
millions of consumers for over 3 decades. The brand has been displaying the
leading flavour soft drinks in the country. The success formula? The sharp fizz
and lemoni bite combined with single minded positioning of the brand as the
ultimate refresher has continuously strengthened the brand franchise. Limca
energizes refreshes and transforms.

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MAAZA
Maaza was launched in 1976. Here was a drink that offered the same real taste of
fruit juices and was available throughout the year. In 1993, Maaza was acquired by
Coca- Cola India. Maaza currently dominates the fruit drink category.

Mango drinks currently account for 90% of the fruit juice market in India. Maaza
currently dominates the fruit drink category and competes with Pepsi's Slice brand of
mango drink and Frooti, manufactured by Parle Agro. While Frooti was sold in small
cartons, Maaza and Slice were initially sold in returnable bottles. However, all brands are also now
available in small cartons and large PET bottles.

MINUTE MAID
The history of the Minute Maid brand goes back as 1945 when the Florida
Corporation developed orange juice power. The company developed a process that
eliminated 80 percent of the water in orange juice. They branded it minute Maid, a
name connoting the convenience and the ease of preparation (in a minute). Minute
Maid thus moved from a powdered concentrate to the first ever orange juice from
concentrate.

KINLEY
Water, a thirst quencher that refreshes a life giving force that washes all the toxins
away. A ritual purifier that cleanses, purifies, transforms. Kinley water understands
the importance and value of life giving force. Kinley water thus promises water that
is as it is meant to be. Water you can trust to be safe and pure.

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Distribution Channels
Distribution is the channel that bridges the gap between an organization and the end
user/customer. All the marketing intermediaries (Sole selling agents, whole sellers,
distributors, retailers etc.) used by the producer for the purpose of making their products
available to users are collectively constituting the distribution channel.

Channels
A number of alternate 'channels' of distribution may be available:

Selling direct, such as with an outbound Salesforce or via mail order, Internet and
telephone sales.
Agent, who typically sells direct on behalf of the producer
Distributor (also called wholesaler), who sells to retailers
Retailer (also called dealer or reseller), who sells to end customers
Advertisement typically used for consumption goods.

Role of Distribution Channel

o Provide distribution efficiency to manufacturers
o Supply products in required assortments
o Provide salesmanship
o Help merchandising the product
o Help implement the price mechanism
o Physical distribution & financing
o Change agent & generate demand

Physical distribution of goods and products is a process of reaching out to the customer. After
the production process is over the main concern for a company is how to make that product
available at the nearest shop of the target customer. For this the company needs to have an

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effective distribution network which is cost effective, reaches to every nook and corner of the
target market and delivers the goods to the shops on time so that there is no scarcity.

The distribution channels hence in turn use these intermediaries to avoid or rather reduce the
following four types of discrepancies:
Spatial Discrepancy
Temporal Discrepancy
Need to break the bulk
Need to provide assortment
There are two types of market viz. urban market and rural market. Both the markets are very
different from each other in terms of preference, frequency of goods sold, price and quality.
With respect to soft drinks it has been seen that the frequency of sale is faster in the urban
market. However as the urban market is getting saturated by the day, the company is pushing
focus towards the largely unexplored rural market. The 200ml bottles which was launched by
Coca Cola was a huge success especially in the rural market.

The various distribution models existing in the industry are as follows:

FIGURE 4- CONVENTIONAL DISTRIBUTION MODEL

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DISTRIBUTION SYSTEM OF COCA-COLA:

THE COCA COLA SYSTEM

Bottlers

Customers

Makes Finish Product, Sells,

Distrbutes

Get Finished Product

Coca-Cola Company
Makes Syrups, Concentrates

he Coca-Cola System consists of the Company and its Bottlers before reaching to the
final consumers. The Company owns the brands and is responsible for consumer
marketing initiatives. The Bottling partners manufacture the final product and also handle

the merchandising and distribution of the products.

The company follows this system all across the world to effectively reach out to their billion
consumers at all times.

DISTRIBUTION NETWORK
Coca-Cola has a wide and well managed network of salesmen appointed for taking up the
responsibility of distribution of products to diverse parts of the cities. The distribution channels
are constructed in such a way that the demand of customers is fulfilled at the right place and
the right time when it is needed by them.
A typical distribution chain at HCCBPL would be:
Production --- Plant Warehouse --- Depot Warehouse --- Distribution Warehouse --Retail Stock --- Retail Shelf --- Consumer

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The customers of the Company are divided into different categories and different routes, and
every salesman is assigned to one particular route, which is to be followed by him on a daily
basis. A detailed and well organized distribution system contributes to the efficiency of the
salesmen. It also leads to low costs, higher sales and higher efficiency thereby leading to higher
profits to the firm.

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.

Indirect distribution: In indirect distribution, an organization which is not part of 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. Sales people and delivery
personnel both have this responsibility. In certain locations special teams who go into
business locations to specifically merchandise our products.

DEPARTMENTS INVOLVED IN THE DISTRIBUTION PROCESS

The Distribution process mainly consists of three departments:
Distribution Department: It appoints distributors and establishes a distribution network,
processes approved sale orders and prepares invoices, arranges logistics and ship products, coordinates with distributors for collections and monitors distribution stocks and their set-up.

Finance Department: It checks credit limits and approves sales orders in compliance with the
credit policy followed by the firm, records collections from distributors, periodically reconciles

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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.

After entering in Indian market, in the heat of expansion, Coca- Cola signed on multiple and
standalone bottling deals. Each plant had its own system of accounting, monitoring, and
inventory. Plus, their just-get-in-there-quickly approach to planting the Coca- Cola flag in the
remotest regions created a tenuous distribution chain. At around the same time, the business
was trying to muscle its way into the rural market by introducing a smaller bottle at half the
price of the traditional Rs 10 bottle.

At Coca-Cola, the process of distribution is in two parts. Coca-Cola has 25 co-owned bottling
plants. And, about 15 sub-sourced and franchised plants. It has about 75 company depots and
franchisees, which are its direct sales outlets. Each of these depots has between 30 to 100
routes, and each of these routes is a set of 50-100 outlets.

Each of the plants used its own transaction system; as a result there were multiple transaction
apps at work including Jaguar, SAP, Tally, Scala, DSND, Prism, DAS and MECS. The
organization MIS was spread across three solutions: Kompass, DPRS and ROSS. Individually
each of these worked well, but the diversity caused a huge delay in putting together sales and
distribution data. With 26 types of systems running at 26 profit centers, data that finally found
its way upstream was real old, 54 days too late. And, of little help to the sales staff. The ground
situation was a practically archaic MIS. The situation needed to be remedied. There was a basic
lack of control, making it difficult to plan inventory. There were also many write-offs. Then,
there is the indirect distribution outlet, the distributors who demarcated their own territories,
and sold fizzy drinks to smaller towns, sub-stockists and super-stockists. On another front, just
getting a crate of Coke to every last district in the country was a logistical nightmare. The
operation depended on distribution data. Without data it would be hard to push Coca-Cola
products.
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To make things more complex, unlike other FMCG operations, distribution in the beverage
industry is built on a one-way street. Because bottles are refilled, the industry has a distinctly
different requirement of data entry at the sales and distribution level. Companies like CocaCola have to keep an inventory of bottles that return empty and those that return full.

Like other beverages company Coca-Cola also follows a two-level distribution channel i.e. the
company first delivers the products to the distributors, these distributors then sell them to
retailers, who in turn, sell them to the final customers. But the major difference between CocaColas distribution system and other beverages companies is that, where other companies have
their own distributors Coca-Cola has franchise distributors. The reason behind this strategy is
to reach in more remote regions. Earlier company used to distribute its product of its own and
for doing so the company had large fleet of big trucks. But as the demand grew they found it
very difficult to reach interior regions because these big trucks were not able to go in much
deep inside due to narrow and congested streets. To overcome this problem company decided
to go for franchise distribution. Now these distributors have much smaller vehicles which can
go through any kinds of streets and on a much frequent basis. Hence the problem of stock out
is reduced to a very significant level.
To carter the needs of different customers company follow different channels. For example
company deals directly with more important clients like malls, international fast food chains,
big hotels and fountains. For other outlets like convenience stores, restaurants, etc. company
deals through distributors. There are separate distributors for glass bottles and PET bottles.

The company has a very tight credit system. It gives one truck consignment (first consignment)
on credit at the beginning of the peak season to its distributors. That credit period is of three to
four months. No credits, except four days credit on pet bottles, are given on rest of the
consignments. The credit given by distributors to the retailers depends upon sales volume of
that retailer, their relationship, retailers reputation and, most important, the month (whether it
is a peak season or a lean season). Generally no credit is given on the premium products, in
place they are used to push the non-premium products of coca- cola. As for example, salesmen
ask retailers to keep few bottles of Coca-Cola (non-premium product) also, if they want to keep
thums up or sprite (premium products).

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Coca-Cola keeps the check on its products, which are up for sale in the market by a method
known as TOTAL PRODUCT MANAGEMENT. With this method a record is maintained at
which month a particular product was sent in the market, hence it is easy to remove the product
from that location to someplace else where sales is high and the products could be sold quickly.
If at all a product is expired after all these efforts, then it is drained. The company collects all
the expired and defected products once in a year (during lean period).

Coca-Cola gives high profit margin to its distributors and retailers. Profit margin on advance
payment is high as compare to normal payment. This is done to encourage dealers to make
advance payments.

There are many route executives (RE) working for the company. Each RE is given
comparatively larger area to operate with number of distributors and market developers under
him. Their job is to coordinate the functions of the distributors. They have to report to the main
bottling plant every once in the week with complete current information about their market.
The company has haired many market developers who work at grass root level. He role played
by them is very vital in distribution network. Through these market developers the company
keeps a close monitor on its outlets. Each market developer is assigned a particular area. They
visit every outlet in their area after every two days.
The job of a market developer is to:

Keep the stock out at minimum level.

Take the sales orders.

To check the compliance of the RED norms.

To properly maintain product display

Keep the coolers neat and clean.

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Coca-Cola provides various after sales service to its retailers such as:

Giving free visi-coolers, chest coolers, tables, chairs, umbrellas, etc.

Many display items are also given, like racks, mobile hangers, caret wrappers,
celebrity shot posters, etc.

Different offers and free gifts are also given each month.

They also run various retailers training programs. For example, they had a training
program called Parivartan recently.

COKES MARKETING STRATEGIES

Coke decides on its marketing strategies at a national level and lends them a local flavor. For
example, while festival mood plays a strong role in marketing, it is activated for Durga Puja in
Calcutta, Dandiya in Gujarat, etc., Coke has its focus on the youth market in India.

As a first step toward catching the attention of the youth, coke signed on cricket heroes Saurav
Ganguly and Javagal Srinath. It slowly started talking about youth passions like cricket, films,
festivals and food. Soon the advertisements started giving the message, Eat Cricket, Sleep
Cricket, Drink only Coca-Cola And now it has started modifying film hits to frame catch
lines that appeal to the youth. This particular strategy has worked well for coke.
Coke is focused on distribution to ensure that its products are within customers reach. And it
saves its focus has begun to pay it dividends. As per mid-1998 figures coke is selling as many
bottles in the hinterland of Punjab as it does the four metros.

COCA COLA GLOBALIZATION STRATEGIES

The Coca-Cola company is global player and approximately 70 % of its volume and 80 % of
its profit come from outside the United States of America. Although it was perceived as a
standardized brand across the world, Coca-Cola had been quietly fine turning its international
marketing strategies to suit the needs of individual national markets. Only the brand CocaCola, sprite and fanta were marketed globally. In Latin America and Europe, where a heavy
consumer preference existed for lemon lime and orange sodas. Coke had developed a wide
range of formulations and flavors to cater the needs of different countries. In El Salvador and
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Venezuela, a version of fanta called fanta kolita a cream soda type of drink became extremely
popular. Similarly, in Indonesia coke had been selling pineapple and banana limca, maaza and
thumps up in 1993.

COKES BOTTLING STRATEGIES

In the soft drink business the bottlers are responsible significant extent for ensuring the
availability of the products. Bottlers are supplied with concentrate to which they add aerated
water and bother ingredients before packing and sealing either cans or bottles. Bottlers play a
strategic role in the success of soft drinks companies and this was not far from Goizuetas mind.

In 1986 the company merged some of its company owned bottling operations with two large
ownership groups that had been put up for sale. All these bottling activities were combined to
from its own subsidiary Coca-Cola Enterprises (CCE) to handle bottling operations. The CocaCola Company took 49 percent equity stake in Coca-Cola Enterprises enabling it to retain its
own balance sheet.

In the network of the Coca-Cola system, Coca-Cola has either of the two bottling operation
done for the company.
1. COBO (Company Owned & Operated Bottling Operation).
2. FOBO (Franchise Owned & Operated Bottling Operation).
After 1993, when Coca-Cola re-enters India market, done a lot of changes in existing system
of soft drink market prevailing in India, by acquiring the major brands and the bottling
operations from Parle. After this company founded some of its own bottling operation in India.

In year 1997, company did a major investment of $700 million in India by purchasing other
bottling operations, all around India and introduces new technology in them. These bottling
plants are called Company Owned and Operation Bottling Operation. Company has full
ownership and operational right for these types of operations. The other type of bottling
operation for the company are called Franchise Owned and Operated Bottling Operation, to
these, the company has given the right to produce the product for the company and to supply
with the territory assigned by the company. Company has no ownership or operational right/
control over these.

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In India Company have 26 COBO and 14 FOBO operations for the production and control of
the whole operation in India. These are divided in to various zones that are given in the
marketing mix section of this report.
Hindustan Coca-Cola Beverage Pvt. Ltd. First established plant is Hathras in India, second
largest plant is Dasna, and the largest one is in Bangalore. Hathras plant has 3 RGB filling
lines. The RGB line operating at mechanical efficiency of 90 % . Company doesnt have the
facility for filling Maaza (RGB and Tetra Pack) a Mango flavour drink of Coca-Cola, pet
bottling, water plant.

The 3As:-

The strategy for reaching increasing numbers of consumers in India is based on the belief that
consumers will buy our products it they are Available, Affordable and Acceptable.

Strategies for the 3As

Focus on the consumer and customer.

To provide quality customer services, and caring about the quality of performance in
respective jobs.

Caring enough about what we do, to it the best we know how.

The 3As is Coca-Cola underlying strategy for meeting its goal to reach increasing numbers of
consumers. How does coke position its limited resources to help meet its good? Let us explore
the specific ways in which the Coca-Cola system addresses each of the 3As:-

Availability
Some of the ways in which the Coca-Cola Company hopes to increase availability of its product
include improved or innovative packaging, dispensing systems, distributions system and
marketing.

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Affordability
The ways to address affordability include pricing decisions, as well as resource management.
To make its product available at a price affordable to the consumer. Continually processes more
efficient and therefore more cost-effective.

Acceptability
Making Coca-Cola brand products the beverage choice for any occasions depends on a variety
of strategies to reach the target audience. The common strategies adapted to effect acceptability
were though sponsorships, promotion youth market activities, community programs, and other
activates.

MARKETING PLAN:

Objectives and Strategies

Marketing objectives follow:

Change Coca-Colas brand image towards more global/local responsible

attitude.

Inform target audience about features and benefits of the new product.

Boost sales based on the predicted overtaking of carbonated drinks by health

drinks by 2015.

Product Description
The new beverage packaging is aimed at the Diet coke range of Coca-Colas product portfolio.
It is a refillable bottle aesthetically styled to appeal to sports/fitness audience. The new
beverage container is made from sustainable sourced materials and production methods.
The beverage container is unique in the way the consumer is encouraged to re-use/refill it.
Being the first to offer a new product feature is a proven competitive strategy. Future
improvements to the product create the impression the company cares about satisfying its
customers, material technology improvements in the future would further the design.

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Features

Benefits

Sports/fitness design

Coke lifestyle connotations

Whatever coke product has been put in the Health/fitness lifestyle connections
bottle by the dispensing unit the logo is Fair-trade, sustainability, eco-friendly
present on the bottle.

connections.

Ergonomically Designed

Cheaper product in the long run

Pricing Strategy
On the right is a marketing tool to work out pricing
strategy. Coca-Cola have a high market share,
competitor pressure has forced customer sensitivity to
price to be fairly high, sales volume is of course high
and profit margin is fairly low as the Coca-Cola
products are fast moving consumer goods. This points
to penetration strategy.
Penetration pricing means the setting of lower rather
than high prices to achieve potentially dominant market
share.
This can only be done where demand for the product is
believed to be highly flexible, basically demand is price-sensitive and either new consumers
will be attracted, or existing consumers will buy more of the product because of a low price.
A good penetration strategy may lead to large amount of sales and large market shares.
The strategy may also promote complimentary products. The main product may be priced low
to attract sales, customers are then sold accessories. This strategy will work nicely in promoting
re-use of Coca-Cola packaging via a beverage holder of vessel which is purchased separately
and refilled.
The potential disadvantage of bringing in this strategy is the likelihood of competitors doing
the same by reducing their prices, therefore damaging any advantage of the reduced price.
Price Penetration is most appropriate in industries where standardization is important. The
product that achieves high market penetration often becomes the industry standard, in regards
to the new Coca-Cola beverage vessel, it is trying to create a standardization of how consumers
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use the beverage container. Coca-Cola are likely to receive stiff competition soon after
introduction of the product, although the product that achieves high market penetration often
becomes the industry standard and other products, even superior products, become
marginalized. Standards carry heavy momentum.

IMC TOOLS used for Coca-Cola:-

It is the pioneer company in 360 degree communications as they rapidly understood they had
to get in touch with consumers to create links & to look for them wherever they are. Coca cola
uses IMC in order to communicate with its target.

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The communication plan is adapted regarding the market, the society, the potential, the product
positioning etc. Coca cola is willing to be close to its consumers, to be part of the daily life, to
become a kind of rituals attached to specific moments; for that they use social marketing to
create emotions and affiliation with consumers, e.g. they raise funds for social causes like
earthquake or hurricane.
Also it always focuses on fun & entertainment as it is the main message they want to deliver.
They adopt their message to target market based on some values: sharing happiness, fun,
tradition of coke
The Promotional Mix: Tools Of IMC
1. Advertising
2. Personal Selling
3. Publicity/Public Relations
4. Sales Promotions
5. Direct Marketing
6. Interactive/ Internet Marketing

1. Advertising
Advertising is defined as any paid form of non-personal communication about an organization,
product, service, or idea by an identified sponsor.
Coca-Cola uses the concept of aggressive advertising to promote its products. Thus advertising
is the most important marketing tool for the company as it has to cater mass consumer markets.
They mainly do national advertising. Company introduces different themes and concepts to sell
their product and advertises mainly in electronic media and out of home advertising. These
advertisements build brand image and create awareness.

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Big names of Indian film & cricket industry mainly become the brand ambassadors of the
Company, such as Amir Khan, Sachin Tendulkar, Akshay Kumar, Aishwarya Rai, Salman
Khan etc.
Slogans A memorable Journey

Coca Cola continuously uses new slogans in various countries (also in India) and are very
cheerful & attractive!!! Those slogans are
1. Open Happiness
2. Brrrrrrr!!!
3. Coca-Cola-Piyo sir utha ke
4. Jo chaho ho jae Cola-Cola enjoy
5. Thanda Matlab Cola-Cola

Mediums of Advertisement
The mediums of advertising used by Coca-Cola are:
1. Print media: They print media for advertisement. Department for print media. Although very
rare, they have a separate.
2. Point of SaleMediums of Advertising & Point of purchase (POS & POP) Materials: Point of
sale material this includes: Posters and Stickers display in the stores and in different areas.
TV Commercials

As everybody know that TV is a most common entertaining medium so TV commercials is one

of the most attractive way of doing advertisement. So Coca Cola Company does regular TV
commercials on different channels.
It focuses on both the urban as well as the rural India with its advertisements.

In the summer of 2011, Coca-Cola introduced the new Brrrrr!! Ad and featured Imran Khan as
the brand ambassador. Now, they have endorsed triplet of movie Student of the Year for
their new theme Haan Mein Crazy Hoon.
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Outdoor advertising

Coca cola is very much conscious about their billboards and hoardings. They have so many
sites in different locations for their billboards. Billboards are usually found at cross roads,
buildings, shops.

Also in India the Coca-cola can be seen painted on walls, bus stands, dhabas etc. focusing in
rural areas of India.

It is essential to take a note that Billboards & banners, cut-out, holdings play an important role
in promotion of coca cola. This is mostly because of its unique, eye-catching red colored brand
logo. You would never miss it!!

2. Direct marketing

Coca-Cola uses direct marketing in many ways. First, the company forms partnership with
various restaurants, movie theatres, hotels etc. to carry its product.

This way, when a customer orders a drink, the only brand they are offered is Coca-Cola,
which forces them to buy a drink from that brand. By doing this, Coke forces out other
competition, and keeps the restaurants, or other businesses, purchasing their product over
and over again. E.g. McDonalds.

Coca Cola also sponsors various sporting events in India and around the world in events
like Cricket, Football, and Motor Racing etc.

3. Interactive/Internet marketing

Coca-Cola uses the internet to promote its products. The company has its own website,
which is quite simple to navigate through. The website allows customers to become
interactive through various games, contests, shopping, and through a special section of the
website that enables consumers to find out how they can help their community.

Also in the modern era of communication and networking, the company uses various social
networking sites like Facebook, YouTube, Twitter to connect with the consumers. A
dedicated section is created on YouTube to see its videos.

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The internet marketing thus helps to reach to those consumers who cant afford to spend
time on T.V and are always online.

4. Sales promotion

A sales promotion is an activity that is implemented to boost the sales of a product or service
temporarily. Coca-Cola does sales promotion in two ways to quickly increase sales.
a. Consumer - Oriented sales promotion:
i. Getting Shelves
ii. Eye Catching Position
iii. Under The Crown Scheme
b.

Trade - Oriented sales promotion:

i. Discounts to retailers and stores
ii. Return back allowances
iii. Merchandising assets
iv. Free goods or free tours

5. Publicity/public move

Publicity refers to non-personal communications regarding an organization, product,

service or idea not directly paid or run under identified sponsorship.

Public relations is defined as the management function which evaluates public attitudes,
identifies the policies and procedures of an individual and organization with public interest,
and executes a program of action to earn public understanding and acceptance.

Coca-Cola can address law suits, rumours, stories, new products, and activities. There is
also a section of the website devoted to investors. Here, current, or future, investors can
access financial statements and up-to-the minute stock information.

The Coca-Cola India is also undertaking some projects as a part of their social cause and
part of the corporate social responsibility.

The Support My School campaign along with NDTV has Sachin Tendulkar as the brand
ambassador.

The project Unnati focuses on more yield of mangoes to farmers.

Coca Cola also Sponsors events in cricket and music.

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6. Personal selling

Coca-Cola has many salespeople, who are individuals representing the company to
communicate, sell, service, and build relationships with customers.

These salespeople promote their product to different customers within their regions,
and once they sustain a customer, they sell their products to them and service them
many times per week.

These individuals form close relationships with the customers in order to continue
business with them.

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RESEARCH METHODOLOGY

OBJECTIVES OF THE STUDY:1. To find out basic detailed information about Coca-Cola.
2. To find out various IMC tools used by them to achieve their Communication, Promotion and
Marketing objectives.
3. To find out relationship between the various objectives of the company and Economic
changes.

SCOPE OF THE STUDY:This study basically tries to discover the current position of Coca-Cola in the market.

RESEARCH DESIGN
A research design is the specification of methods and procedures for acquiring the needed
information. It is overall operational pattern or framework of the project that stipulates what
information is to be collected from which source by what procedure.
There are three types of objectives in a marketing research project:

Exploratory Research.

Descriptive Research.

Causal Research.

1.

Exploratory Research:-

The objective of exploratory research is to gather preliminary information that will help define
problems and suggest hypothesis.

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2.

Descriptive Research:-

The objective of descriptive research is to describe things, such as the market potential for a
product or the demographics and attitudes of consumers who buy the product.

3.

Causal Research:-

The objective of casual research is to test hypothesis about casual and effect relationships.

Here, the research design used will be Descriptive research design.

DATA COLLECTION SOURCES:The data has been collected from secondary sources.
SECONDARY DATA:It is defined as the data collected earlier for a purpose other than one currently being pursued.
Secondary data in this study has provided an insight and forms an outline for the core objectives
established.
The various sources of secondary data used for this study are:Newspapers.
Magazines.
Text books.
Marketing reports of the company.
Internet

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Limitations:All data is secondary, which is collected from internet.

o The variety in the lifestyle of people also affects the study.
o The information collected by us is limited because of lack of time constraints.
o The information obtained by us is used as secondary data may not survey as another
persons objective.

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SWOT ANALYSIS:
SWOT Analysis is the process of analysing the company and the environment in which it is
operating. This analysis helps in formulating effective strategy for the company to deal with
competition. SWOT stands for Strengths, weaknesses, opportunities and threats. Strengths and
weakness are internal to the organization, whereas opportunities and threats are external to the
organization.

Strengths:
High Quality Products: The products of Coca Cola are well known for their product
quality.
Highly Reliable Products: Coca Cola products are highly reliable in the Indian
beverages market.
Best Seller Products: Coca cola has two of the bestselling products Thums Up, Sprite
all over India.
Brand Loyalist: Coca cola has huge number of brand loyal people. It has been already
proved, as the Coca Cola products are the best seller in the beverages segment all over
the world.
Coca cola has a huge product mix to cater every segment of the market.
Availability, Affordability, Acceptability: These additional features of our product give
us an added advantage over our rivals in the CSD segment.
Weaknesses:
Less efficient distribution channel: The present distribution channel lacks penetration
because retailer activation involves higher cost. Coca cola needs to become the
Hindustan lever of India.

Brand killing strategy of coca cola: Coca cola tends to kill the local brand in order to
promote its own international brands. Coca cola has done this in past and still follow
this strategy. Coca cola has put behind Limca in order to promote its other international

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brand Sprite and

MMPO.

Horizontal and vertical conflict exists in the distribution channel. Distributors are trying
to eat up the profit of the distributors of the adjoining area.
Opportunities:
Some of the segments are still untouched by coca cola like the juice segment and the
milk product segment. Our rival Pepsi has paid attention to this segment and therefore
gained a lot from this segment. A vast market of 1200 crores or 500 million cases has
been untouched by coca cola.
Every market has its own local needs. People need changes over the season for example
people tend to switch over to drinks like Lassi and Neembu pani. Coca Cola should
come up with drinks which are more local and seasonal.
In metropolitan areas people are becoming more health conscious and therefore prefer
drinks which are nutritious and health beneficial. This segment needs attention.

Threats:
In the CSD segment there is still a price war between Coke and Pepsi, therefore both
the rivals maintain the same price but the way in which the rivals can gain advantage is
by influencing the distributor and the retailers by offering them special schemes.
Since retailers are always profit oriented they tend to shift their preferences which can
turn out to be a major loss.

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CONCLUSIONS
The Coca-Cola Company is the world's largest beverage company, largest manufacturer,
distributor and marketer of non- alcoholic beverage concentrates and syrups in the world, and
one of the largest corporations in the United States.

As others, Coca-Cola Company also has Integrated Marketing Communication

(IMC) objectives and strategy. The objectives of Coca-Cola campaign are to make it be more
motivated. Marketing campaign strategy consists of public relation strategy, advertising
strategy and marketing strategy. Public relation strategy is used to establish a mutual
understanding and create a good image or credibility from the company with its customers. It
can be achieved by sponsoring many events, such as sport or charity events. Those are what
Coca-Cola Company does too.

Advertising strategy is usually done through media, either print media (like
newspapers, magazines, etc.), broadcast media (like TV and radio) or digital media (like
internet). It aims to tell the information about the product to community.

The strategy that relate with the sales is marketing strategy. This talks about the
right product, price, place, and promotion in order that people buy the product and satisfy with
it. Coca-Cola produces the right product with many options of sizes and taste; sets the right
price with more expensive price than others (because of the good quality and values of CocaColas products); definite the right place with stocking up products in supermarkets and
retailing stores; and uses the right promotion with sales promotion. Marketing tactics are also
done by right segmentation. Coca-Cola Company produces many kinds of product. Each
product satisfies a certain group of target market. Its target markets are usually teenagers.

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Recommendations:
After thorough research, we come to the conclusion that the marketing strategy of Coca Cola
is working for them and the product is gaining popularity among youth day by day.
Coca Cola Company should try to emphasis more on providing their infrastructure in
the market to facilitate their customers.
Marketing team should try to increase the availability of Coke in rural areas.
They should also focus the old people.
In case of cold drinks selling mostly depend on retailer. So that his satisfaction needed.
Defected goods should be returnable or changeable.
Sales executive & salesman relation and good behavior also provide effective
guidelines in increasing selling.

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BIBLIOGRAPHY
1. Balakrishnan V., C. S. Rajkumar, Innovation in Marketing Management Excel Book,2006.
3. Gibson G., Retail Management, Jaico Publishing House,2007.
4. Joseph H. ,D. Ontinau , Marketing Research ,The Tata Mc graw- hill publishing company
ltd. ,2005.
5. Sherlekar.S.A., Marketing ManagementHimalaya Publishing House,2008.
Websites
1. http://agro.indiamart.com/agricultural-commodities/soft-drin
2. http://www.coca-cola.com
3. http://www.rasnainternational.com/
4. http://en.wikipedia.org/wiki/Soft_drink

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