A Project Report

On

Distribution & Channel Management

Of

Under the Aegis of

Submitted to: Submitted by:

Prof. Manish Saraf Divy Dubey (0040)

Prashant Mohan (0080)

Rajdip Dey (0085)

Ranjit Behera (0089)

Sumit Khunteta (0139)

Yashpal Rai (0138)

Introduction

The Coca-Cola Company has a global business that tactically operates on a local scale, in
each and every community where they do business. According to official statistics, near
about 1.9 million products of Coca-Cola are sold around the world on a daily basis. Coca-
Cola since its inception in 1886, gave rise to the term Coke which is now the world’s second
most recognized word after “okay”. The company is able to create and maintain a global
reach with adequate local focus with the help of the strength in its system, which comprises
of The Coca-Cola Company and more than 250 bottling partners around the world. The
company’s system is not considered to be a single entity from any legal or managerial
perspective, as the company does not own or operate all the bottling partners.
Although being a global brand, Coca-Cola’s products never travels far to reach the end
consumers, making the product as much local as it can get. The businesses are considered
more to be of local nature as the products are not required to ship for more than a few
hundred kilometres. So it all comes down to the responsiveness of the distribution
channels to the consumer needs and their distribution system can be considered as one of
the most well-structured compared to the other drinks of the similar category. The
organization have made such an impact on consumers that even wholesalers and
distributors feel the need for the company’s product for their businesses success. Coke has
achieved such a position by enabling high visibility of the products and by making available
the product even in the most remote corners around the world.

The Coca-Cola Company started its operations in India in 1950 but however they withdrew
operations from the country due to complications arising out of GOI regulations and
legislation. On 1993 the company re-entered into the Indian market and they have
maintained a strong presence ever since. Hindustan Coca-Cola Beverages is in charge of
the assembling, bundling, dealing and conveyance of refreshments under the trademarks
of The Coca-Cola Company.
Objective of the study

As it is already known that The Coca-Cola Company operates on a local level throughout
the globe, it could also be comprehended that their operations around the globe would
vary vastly depending upon the demand side based factors. As HCCB is the Company
Owned Bottling Operation of Coca-Cola India, the objective of this study is to understand
the distribution method of HCCB’s products from distributors to retailers particularly in
Indore region. Coca-Cola is well known for its distribution methods throughout the world,
hence the aim for this study is to understand that whether Coca-Cola is able to maintain
their global efficiency standards in the local operations in this part of the world where the
demand is massive.

Methodology

To understand the distribution system of HCCB, primary information regarding the same
was collected from one of the Sales Team Leader of Indore region Mr. Noopur Geete. Also
several key information was collected from the Smart Tablets carried out by the Market
Growth Representatives. To check the authenticity of the information provided, further
interactions were done with few key channel partners of the distribution system.
Description of the Distribution System of the Company
Products of HCCB:

Soft Drinks
• Coca-Cola, Coke Diet (No Sugar), Coke Zero
• Sprite
• Thums Up, Thums Up Charged
• Fanta
• Limca
• Rim Zim

Mineral Water
• Kinley
• SmartWater

Juices
• Maaza
• Apple Sparkle
• Minute Maid (Guava, Orange, Apple, Mixed Fruit, Litchi, Anar, Cranberry)
• Kinley Fruitzz
• Sprite Juicy+
• Fanta Juicy+
• Limca Juicy+Masala
• Aquarius Glucocharge
• Minute Maid Smoothie

Energy Drinks
• Monster Energy (Sugar and Sugar-Free)
• Powerade

Mixers
• Schweppes Tonic Water
• Schweppes Soda Water
• Kinley Soda
Channel Partners Involved & Channel Structure:

Production
Schweppes
Tonic
Water
Plant Warehouse
Schweppes
Soda
Water Depot Warehouse

Kinley
Soda
Distribution Warehouse

Spokes Warehouse
Retail Stock

Key Accounts

Retail Shelf

Consumer

Channel Management Strategies:

The company takes care of the demand forecasting with the combination of top down and
bottom up approach. Forecasts are done based on factors such as:
 Historical data
 Economic parameters
 Seasonal variation
 Festivals, Ceremonies etc.
 Weekly reviews for adjusting monthly forecasts
These forecasts are done region-wise by HCCB and they are further broken down into tier
1, 2 & 3 cities, followed by towns and villages.
The Company focuses on area wise distribution of the product and the promotional
schemes vary accordingly. There is a special focus on high traffic locations such as railway
stations and bus stands. Also there is a dedicated segmentation model which HCCB
operates with to adhere to the dynamic range of demand throughout the country.
Channel Management in Indore Region:

 Market Growth Representatives are deployed by HCCB in different beats across the
Indore region. These MGRs collect order from the outlets on their beat and punch
the same in the tablets provided to them by the company.
 Each beat consists of 35-40 Outlets approximately. These outlets are broadly
classified into E&D 1 (Eating & Dining), E&D 2 (Takeaways) & Convenience Shops.
 The registered order is then taken care of the very next day by the salesman and
distributor who ensure delivery and payment. There is no presence of credit line
in the entire system.

Strategies for Indore Region:

 Special focus on sales of Juice products due to low GST rates on juice based drinks.
 Providing visi-coolers to outlets capable of achieving good sales.
 Occasional special schemes on products that are selling less, for an example Limca
(2l) was sold with a scheme of a pressure cooker provided the outlet owner buys 5
Cases of 2L Limca.
 Sampling of Premium Products in posh areas of the market to increase awareness
and generate demand. Promotions also done of most selling products reaching
expiry which acts as a leverage in creating a good brand image.

Performance Management:

 Monthly targets are given to MGRs, which are divided into daily run rate & targets
are given on the basis of cases to be sold while taking into consideration the
demand side factors.
 Remaining target of a day gets added up into the next day’s target.
 Upon achieving the given targets, individuals are eligible for additional monetary
incentives and benefits such as foreign trips.
 MGRs are also required to add new outlets every year which are part of their
Horizontal Expansion targets.
Employee Performance Ratings:

Developing
Exceptional Successful
performance – DP
performance – EP performance – SP No Performance –
Contributions meet NP
Contributions Contributions meet
some / most but
significantly exceed and sometimes Contributions
not all of the
the stated exceed the frequently do not
objectives and
objectives in terms objectives, which meet the stated
performance
of quality, quantity are based on objectives.
improvement is
and timeliness. challenging goals.
necessary.

Also, there is a tool named RED (Right Execution Daily) to measure the performance of the
distributor in all outlets, which relies on the standard of execution while checking visi-
cooler and enquiring about availability of the Product in the Outlet.

Conflicts:

 Outlet owners refuse to place orders as wholesalers and under cutters offer better
margin to the outlet owners at cheaper cost.
 Stock out of products, failure to visit outlet owners on right time & delay in delivery
results in cancellation of order.
 Between the company and the outlet owners as they keep competitor’s products
in the visi cooler.
 During offseason misbehaving Salesmen of the distributors cost the organization
good customers, also distributors try to enter into each other’s territory secretly.

Conflict Management:

 Agreements (providing additional discounts other than existing schemes) with loyal
channel partners (loyal outlets) and those outlets capable of giving good sales, basically
market penetration to beat competition.
 Proper management of inventory is being ensured by increasing coordination between the
Sales Team Leader and the Distributor under the supervision of Area Sales Manager.
Recommendations

Sales team leader (STL) and Market growth representatives (MGRs) should closely monitor
the market. They must track all activities related to agreement of coolers, quantity
purchase scheme which is given to retailers and the orders taken by MGRs are delivered or
not.

Advanced devices on premier outlets can facilitate quicker order placement. It would
benefit both the distributors and retailers in efficient stock management. The real time
order processing system through use of technology helps reduce the lead time.

Tighter Purification norms must be implemented across outlets which would affect the
competitor Sales significantly and as a substitute a HCCB product could be put in place of
that competitor’s products.

Sales Team Leader should also implement GTM (Go to Market) strategy to make sure that
all the Market Growth Representatives under him/her visit all the outlets and track delivery
of the orders collected.

Limitations

Most of the quantifiable information is kept classified by the organization and as a result
the employee could not provide with the same, which somewhat affected the quality of
the project.

Seeking the outlets for information was not fruitful as the other party was not much
cooperative due to various reasons such as customer handling pressure, fear of further
complications arising in the channel etc.