Pepsi cola

Dedication

To

My graceful and polite parents

Who live in my mind and soul
Whose love is more precious
Than pearls and diamonds

To
My loving brothers and sister
Who are nearest, dearest and deepest to me

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AKNOWLEDGMENT

Praise to be to “Almighty Allah” the creator of heaven and earth

Who blessed man with his mercy and said
“Read! And the Lord is most Bounteous, Who teach by the pen
Teach man that, which he not know”
(Al-Quran, Section 30, Surah 96, Ver: 3-5)
As glory to be to Holy Prophet (PBUH), the most perfect and exalted, who is forever a lighthouse for
the humanity as a whole.
Other people helped me the internship that is my Friends, Cousins, and my Colleague

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EXECUTIVE SUMMARY
 PepsiCo, Inc. Purchase, NY a well reputed multinational company includes in beverages
industry formulated in 1898. Pepsi Cola international is doing its business in almost every
country of the world. The company is registered in New York stock exchange U.S.A.
 SHAMIM & Co. were established in 1967 as a private limited company. It has got the status
of “Mega Plant” in 2001. It is covering the complete area of south Punjab along with Sahiwal,
Pakpattan, Vehari, Khanewal, Okara and all out skirts. Started its business in 1967 and now
days it is one of the biggest franchise of PEPSI COLA products in Pakistan.
 The following departments are working in SCL to provide customers quality soft drinks.
Production, Shipping, Sales & Marketing, Accounts & Finance, Administration, SIS &
Research, MIS, Management Accounts, Information Technology

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TABLE OF CONTENTS
Pages
Chapter No 1
Introduction…………………………………………………………... 06
History………………………………………………………………… 08
Mission Statement……………………………………………………. 08
Chapter No 2
Product line…………………………………………………………… 10
Competitors…………………………………………………………... 10
Organizational Structure……………………………………………. 10
Departments………………………………………………………….. 11
Chapter No 3
Plan of Internship Program………………………………………... 14
Chapter No 4
Structure of Marketing Department………………………………. 19
Sale…………………………………………………………………… 20
Functions of Marketing Department……………………………… 22

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Chapter No 5
SWOT Analysis……………………………………………………... 36
Recommendations for the Company……………………………... 37
Chapter No 6
Financial Ratios…………………………………………………….. 41
Conclusion………………………………………………………….. 51

Chapter No 1
Introduction

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Pepsi Cola International

PepsiCo, Inc. Purchase, NY includes in beverages industry. Pepsi Cola international is well reputed
multinational company which is doing its business in almost every country of the world. The company is
registered in New York stock exchange U.S.A. to make a better control over the business the company
has given the manufacturing rights to different companies. Now these companies are producing the
products on the behalf of the company by using their trademark. To maintain their goodwill in the
market the company has a strict policy while granting the manufacturing rights Pepsi Cola have
standardized products all over the world (e.g. same in size, shape and quality). The franchises have to
follow all the standards as given by the company. Even they have the mobile team, which check the
company after 2 or 3 months. Either company is producing products according to the standards given by
the Pepsi Cola international.

PEPSI COLA in PAKISTAN

Pakistan today has a very competitive beverages market. Opportunities for this industry to establish
itself firmly in this country were gloomy at first because of the country's low per capital income and
because of the business' status depending on consumer motion. .
In 1967 Shamim Khan Tareen first got the franchise of 7-UP and established a production unit in
Multan. They started producing and marketing 7-UP. In 1972 they also started producing Pepsi at the
same plant. This is the only unit in the world that is producing both Pepsi and 7-UP at the same unit
Due to increased consumption, marketing efforts, they built new units in Faisalabad, Lahore, and
Gujranwala. It covered the whole southern region.
Philip Morris Company, renowned for its tobacco products handled 7-UP brand. For the last 10
years Shamim and Co. has again taken over the franchise.
primary goal is not to undermine the competition but to expand the market as a whole. Analysts believe
the potential market in Pakistan is though to be enormous because the country's per capita consumption
is as low as 14 bottles per year.

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SHAMIM & COMPANY

History:
SHAMIM & Co. were established in 1967 as a private limited company. It started its business in 1968.
Shamim Khan Tareen on behalf of Allah Nawaz Khan Tareen (Ret. DIG) got license of 7-up franchise
and was producing only one product, 7-up. But in 1973, it became Pepsi Cola franchise. Now a day MD
of SHAMIM & Co. is Alamgeer Khan Tareen son of Allah Nawaz Khan Tareen.

Introduction
In Pakistan, at present SHAMIM & Co. is the largest production unit out of 11 franchisees. SHAMIM &
Co. covers the area of Southern Punjab which consists of Multan, Bahawalpur, Bahwalnagar, Dera
Ghazi Khan, Sahiwal, Khanewal, Rajan Pur, Taunsa, Okara, Rahimyar Khan and Layyah. The company
is properly serving all these areas with quality products.

Honors
In Pakistan, SHAMIM & Co. is in the list of top three out of eleven showing financial and sales growth
according to their relative volume size basis. When franchise cross a certain volume, plant is classified
as, “Mega Plant Status”. SHAMIM & Co. has achieved this status in 2000 and 2001.

Mission Statement of “SCL”

SCL’s mission seems “They make, sell and deliver beverages." But, in the competitive market, it
provides an excellent service, favorite drink, strong external relationships and best business strategy”.

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Chapter No 2

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Product Line
1 Pepsi
2 7UP
3 Mirinda
4 Mountain Dew
5 String
6 Pitch Black
Competitors
COCA COLA Company is the Competitor of Shamim and Company

ORGANIZATIONAL STRUCTURE

Managing
Director

GM
GM GM Sales & GM GM
Administration
Plant Marketing Finance Operations

Sales &
Manager Marketing Manager Shipping Security
Production Managers Finance Department Department

MIS Manager
Manager Manager Motor
Manager Personnel
Quality Control Accounts Workshop

Manager Manager Mgt. Excise Cash

IT Manager
Services A/C Attorney Department
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DEPARTMENTS
For effective control & to serve these areas more properly the company has the following departments.

Production Department
This department is responsible for the production of the products according to the requirements of the
customers and also controls the quality of the products as per PCI standards.
Administration & Personnel Department
Administration & personnel department deals with the overall matters of the company and takes
different actions for increasing the performance of the company. This department also carries out
different social welfare programs.
Sales / Marketing Department
This is the key department which is making all possible efforts to make company mission statement to
rationality. This department is doing all tedious exercises to increase the sales of the company by
sponsoring different social programs, managing distribution channels, managing all marketing activities
and by advertising to get the competitive advantages.

Finance Department
It deals with the financial matters of the company. It collects the revenues and makes different payments
and maintains proper record of the financial performance of the company’s business to show the net
result in the form of either profit or loss.

Audit Department:
Audit department is a section of Management Accounts Department a sub department of Finance. Mr.
Tahir Ameen (Manager Mgt. Accounts, Audit & IT) is head of department. The immediate head of Audit
is Mr. Javed Iqbal. It is a team of 6 members. The main responsibilities of Audit are to verify physically
the different stocks in all depots and godowns.
Accounts Coordination:
It is a section of Finance department supervised by Mr.Shahid Nazir with a team of 3 members. Their
main task is to provide one window solution of bill clearing of sales & other staff and different parties.
They play a rule of coordination between party and accounts department.

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Management Accounts:
Mr. Tahir Ameen (Manager Mgt. Accounts, Audit & IT) is head of department. Management Accounts
department is supervised by Mr. Asim who is Asst. Manager Mgt. Accounts. He is supervisor of a team
of 10 members.
Mr. Suhaib Khalid Mgt. Accounts Executive is Supervisor of 2 sub sections of Mgt. Accounts
(Clearance Inspection, with a team of 10 members and Waste control section with a team of 16
members). The responsibilities of Mgt. Accounts are to generate more than 60 reports to calculate the
performance of all departments on daily basis. This department makes the MD up to date with every
issue of the company.
Insurance:
It is a Sub Section of Finance. Head of Finance Department is Mr. Shoaib Tirmzi. It is a section of 3
members. They deal with the banks and insurance companies regarding insurance of assets and
employees.
Team Tracking:
It is a department which controls the performance of Finance employees & also deals with new
appointments and internship programmers.

IT Department
It is a department which controls the all over the systems, software and networking of factory, DPG’s
.This department is under working of Mr. Masroor bhatti. Two departments is in working
1. IT Support
2. IT Development

IT Support
This department controls the all over the systems and networking of factory and DPG’S. This

department is under the working of Mr Saqib Javaid.

IT Development
This department makes new software and controls the previous software. This department is under the
working of Mr Masroor Bhatti.

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Chapter No 3

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PLAN OF INTERNSHIP PROGRAME

My internship duration was (06-06-2016) to (04-08-2016)

Sales and Marketing

Sale and marketing is the most important department of any beverage company. To maximize the sales
and profit, this department should be proper planed and managed. Shamim & co. Pvt. has a very
aggressive and hardworking Sales and marketing department. Due to its efforts the company has got the
position in sales in throughout the Pakistan.
In this department I was training (06-06-2016) to (18-06-2016)

Audit Department:
Audit department is a section of Management Accounts Department a sub department of Finance. Mr.
Tahir Ameen (Manager Mgt. Accounts, Audit & IT) is head of department. The immediate head of Audit
is Mr. Javed Iqbal. It is a team of 6 members. The main responsibilities of Audit are to verify physically
the different stocks in all depots and godowns.
In this department my internship duration was (19-06-2016) to (26-06-2016)

HUMAN RESOURCE DEVELOPMENT

Human Resource department is one of most important part of any organization which performs
the activities for staffing the organization and sustaining high employee performance. The Human
Resource mfg. process is as follow.

Recruitment procedure in Shamim & co:

Major sources of potential job candidates are

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 Internal Search Advertisement

 Employees Referrals
 School placement
 Selection devices used for selection of graduates, masters & MBSs are
 Application form written tests (English, Math, business/Engineering essay)

Interviews for worker level job where qualification and skill requirement is low, this formal
procedure is not adopted rather candidates abilities are fledged by department head and sent to factory
manager for approval. Orientation is the introduction of new into his or her job & the organization. This
is for few selected persons in Shamim & co training is generally on the job employees in all departments
are bearing by the time or with the help of seniors.
The organization provides compensation benefits to its employees such as:

 Accommodation
 Holidays
 14 Annual
 1 O Casual
 16 Medical with 112 pay. Annual pay
 Increment & bonus.
 Medical facility
 Mess
Time office maintains personal file of each employee, daily attendance, leaves, incentives &
commission etc., job descriptions and organizational chart are available for all employees. Employees
are rotated from one department/post to other on request or when required. Payroll system.

OBSERVATION & SUGGESTIONS

There should be proper planning by:
Assessing current human resource stands & generating human resources inventory.
 Assessing future human resources needs by organization’s strategies & future programs.

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 After assessing current capabilities of future needs a program should be developed to have right
person for the right job & at right time.
 At the moment, HR department is itself facing staffing problem & it seems to be non-existent.
 The selection process through which candidates pass is very slow & time consuming pass is very
slow and time consuming. Candidate have to sit day long waiting for management approval to
start test & then. There is service of interviews which have no time table. It is generally three
four days patience test & troublesome for candidates from other cities or already doing jobs.
 For the medical bills and small loan employees need to get managing director’s approvals and
then pass through a long procedure. It should be simplified. Department heads should be
authorized to approved loans and medical bills up to a certain amount .
 Computer & job related aptitude test should also be made part of selection tests to have better job
personality fit.
 Formal training is conducted but that is due to ISO department not with the planning/efforts of
HR department.
 Performance appraisal has only once but it was a useless exercise because its results were not
used in future planning or changes. Performance appraisal should be conducted:
 To know development & training needs of employees.
 To get performance feedback.
 Anticipate direction for future performance
 To change/ compensation system.

There is not idea of planned career development in Shamim & co. Career development can be in
term of job rotation, transfer & promotion. It improves the organization's ability to attract of retain
talented people, anticipating change & helping employees to learn new skills and improve utilization of
a personal abilities.
Motivation is the willingness to exert high level of effort to reach organizational goals. The
general level of motivation in Shamim & co employees is very low and in Shamim & co employees is
low and they are dissatisfied with their jobs and pay scales. Only best employer of the month program is
implemented highlight employees whose work performance is excellent.
There would be lobbies or affiliations in the organization. These should be canalized in positive

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approach e.g. mentoring, communication link instead of source of conflicts.

Teams (functional, self-managed, cross functional, problem solving) should bl.: USl: to speed
decisions, increase performance, facilitate cooperation & improve employee morale.
There must be some channel to communicate employees problem/suggestion/comments directly
to top management e.g. suggestion box. These suggestions should be discussed in quality control
meetings.
No attitude surveyor any internal research has ever conducted by the HR department to get
insight of employees thinking.
Once best employee of the month award be for each department.

They output criteria of an employee’s personality organizational characteristics, group, team or

departmental variables and organization's structure and Human Resource policies is performance
Absenteeism turnover & job satisfaction.
Employees in Shamim & co are performing well but they have low level of motivation.
Absenteeism is controlled because total forty annual leaves are allowed but more important reason it that
employees feel self-responsibility. However the alarming indicators are turnover and job satisfaction.
The organization is facing high turnover rate and employees are dissatisfied with their jobs and pay
scales. Experienced staff is leaving the organization or searching for opportunities. With the kind
attention and efforts of general manager & deputy general manager, the situation is improving. Qualified
& young people are joining the organization. The pay scales of metric, intermediate & graduate
employees are revised. However much more is needed to do in this regard.
In this department my internship duration was (26-06-2016) to (10-07-2016)

Accounts Coordination:
It is a section of Finance department supervised by Mr.Shahid Nazir with a team of 5 members. Their
main task is to provide one window solution of bill clearing of sales & other staff and different parties.
They play a rule of coordination between party and accounts department.
In this department my internship duration was (11-07-2016) to (04-08-2016).

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Chapter No 4

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Structure of Marketing department

Head
Head of
of Sales
sales

Devisional Sales Manager

Area Sales Manager

Sales Officer

Order Booker

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Sale
Sales involves most or many of the following activities, including cultivating prospective buyers (or
leads) in a market segment; conveying the features, advantages and benefits of a product or service to
the lead; and closing the sale (or coming to agreement on pricing and services).
It appears that the attributes of strong leadership and effective selling have a tremendous amount in
common. After all, to be really successful in sales, you need to be a leader, both within your own
organization, as well as to your clients and customers.
There are seven secrets to leadership, as they apply to leadership in selling:
1. "Unwavering Courage": Selling successfully requires courage; taking a risk where the odds may seem
stacked against you; courage to make that extra call, to deal with the tough client or prospect, and to not
let anything deter you.
2. "Self-Control": The ability to set a course for yourself and take disciplined action each day is a key
attribute of all successful salespeople.
3. "A keen sense of justice": Knowing right from wrong - understanding what is fair and just - allows
you to make, wise informed decisions.
4. "Definiteness of decision": Deciding on what you want to achieve, and then doing whatever it takes to
get there, even in the face of obstacles and setbacks, is crucial to your success.
5. "Definiteness of plans": The successful leader must plan his work, and work his plan. Plan your time,
and then take action on your plan each and every day.
6. "The habit of doing more than paid for": Want to sell more? Go the extra mile for your clients. Want
to get the respect, admiration, and cooperation from your internal "clients" - the people you need to rely
on to implement or help you close sales? Go the distance for them as well.
7. "A pleasing personality": Is selling a popularity contest? No, but would you buy something from
someone who was nasty and rude?
Sale of last year of haidri beverages was 10.7 million cases but the target was 10 million cases, this
shows the efficiency of the company. Market share of different Pepsi brands is given below.

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Market Share of Pepsi Flavors

Flavor market share

Pepsi 29%
Mirinda 9%
7up 20%
String 10%
Pepsi diet 1%
7up diet 2%
Mountain dew 29%
Pitch Black New flavor

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Functions of Marketing Department

Following are the major functions of Marketing department.

 Marketing Development
 Outlet
 Tactical analysis and routine planning of market strategies.
 Competition activity monitoring
 T.O. Ts. management
 Publicity management
 Sensory indices management
 Time management
 Price Planning
 Promotion planning
 Distribution planning
 Market Segmentation

MARKET DEVELOPMENT
The first and the most basic job of the sales and marketing department is to plan, develop and
make targets. And also to make strategies to achieve those targets and develop the market. The following
major factors are considered in this respect.

 Collection of all the data about each and every distributors/ outlets, about its sale, volume,
growth and exclusivity.
 Finding the gaps in the market where there is a potential.
 Finding the points where competitor is strong and hoe we can break this point.
 Location of nontraditional shops where potential is available for the beverage.

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 Different offers must be given to break the competitors point or win the mix point.

OUTLET
Outlets play an important role in strengthening the market. By monitoring them you can build
your market, have their loyalty and increase your sale. Sales persons should continuously visit outlets,
listen their complaints and satisfy their needs and requirements. They must have information about each
and every outlet, its growth, and volume and type business. Proper check must be maintained to get the
feedback from the shopkeepers

Tactical Analysis & Routine Planning Of Market Strategies: -

On the market side the sales people gather information and on the bases of these information
they further plan and improve their strategies.

 Checking of the designated area, its sale, volume and growth.

 Calculation of share n brands and package wise
 Calculation of daily sales achievements on monthly target basis
 Location of the poor performance factors and analyzing their cause
 Finding their solution and getting the approval for its execution.
 Planning for a schedule for the designated area.
 Visiting the area according to the plan and reporting it to the higher management

Competition Activity Monitoring

On the other hand a constant intention has been given to the competitor’s activities, strategies
and offers. They have been compared with ours and updated according to the environment

Following are the key factors to be noted in respect of the competitor:

 Nothing the competitors investments i.e. T.O.Ts., Publicity,

 Discounting, Promotional schemes, empty management,

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 Cash credit, Vehicles injection (etc.)

 Reporting to the higher authority.

 Taking action to block the competitors activities and monitoring Our

T .O. TS. MANAGEMENT

T.O.Ts means list of items available in a shop, which helps to sell our product conveniently on
priority basis. It is one of the major investments being made by the company. T.O.Ts. management
completely depends upon the Sales force. The factors to be considered are

 Data collection about the sale, volume, growth, profitability, size and place of the sholp
 Record of all the T.O.Ts. Given to the shopkeeper.
 Further plan for the injection of T .0. Ts.
 Checking all the equipment time by time any removing their complaints

PUBLICITY MANAGEMENT
To promote the image of the company and its products, publicity is a major tool. Publicity plays
an important role in the promoting the image in the consumer's minds.

Publicity involves Banners, posters, signings, gifts and schemes. Publicity budget is spent by
focusing the followings.

 Location of the area.

 Arranging the sources and requirements and making priority lists
 Carefully arranging the publicity execution.

SENSORY INDICES LEVELS MEASURES

Sensory measures means to check the quality and standards through the senses. The colour, taste,
appearance and other specimens of the bottle, must be checked time by time so that the standards of the
PCI may not doubted

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EMPTY & LOAD MANAGEMENT

Empty management means full utilization of available empty at higest productive Trippage level
within the franchise area.

There are two types of empty management i.e.

 Empty management within distributors & within Salesman.

The sales and marketing department have to manage, plan and make strategies a about the
distribution of empty whether it is on credit or cash. The department also has to handle and manage load.
Whether it is on vehicles or shipping or distributors or at the depots level. At shipping level load
management can be divided into
 Package wise
 Brand wise
 Demand wise

HOW TO MANAGE THE EMPTY

Following are the steps which are necessary to manage the empty
 Estimation of empty available (within shopkeeper)
 Estimation of empty available ( within distributors )
 Previous sales record of each specific area within distributors.
 Trip page level tracking of each distributor for the last two years at least.
 Estimation of sales volume growth for at least last three years
 (Distributors or salesman rout)
 Estimation of empty injection volume for at least three years
 (Distributors or salesman rout)
 Comparison of empty Trip page from the one to other distributors/salesman rout.
 Factors causing poor Trip page

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 Factors involved causing hyper Trip page.

 Empty plan (Forecasting) based on the previous years Trip page
 Level & Percentage increase of empty injection.

TIME MANAGEMENT
Time management is the most important factor especially in a Beverage industry, because it is
wholly dependent on Sales and Marketing Department. And without proper management of time this
department cannot run. Following are the key factors which are to be considered necessary for the
management of time:
 Drop size of a specific area.
 Tonnage of the vehicle for that specific area.
 Total operational time management
 Idle time monitoring and elimination.
 Calculation of outlet knocks time.
 Calculation of available knock time for each outlet of a specific area.
 Define and ideal knock time for an outlet.
 Setting of a comprehensive plan, by considering all the above factors

PRICE PLANNING
Price is the amount f money and / or other item with utility needed to acquire a product price is
significant in our economy, in the consumer’s mind, and in an individual firm value is also important as
a component of value. Value is the ratio of perceived benefits to price and any other incurred costs.
Good value indicates that a particular product has the kinds and amount of potential benefits such as
quality, image and purchase convenience consumers expect at a particular price level. A product’s price
is a major determinant of the market demand for it. Price affects a firm’s competitive position and its
market share. To be useful, the pricing objective management selects must be compatible with the
overall goals set by the firm the goals for its marketing program.
There are 3 pricing objectives:

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Profit oriented:

 To achieve a target return.

 To maximize profit.

Sales oriented
 To increase sale volume
 To maintain or increase market share

Status oriented
 To stabilize prices
 To meet competition

Pepsi Cola use status quo-oriented pricing objective Pepsi Cola intended simply to maintain the firm’s
current situation that is, the status quo.
Pepsi Cola adopt status quo pricing goals to avoid price competition is not necessarily passive in its
marketing. Quite the contrary typically like other status quo-pricing objective companies, Pepsi Cola
also compete aggressively using other marketing mix elements. Product, distribution, and especially
promotion or simply Pepsi Cola use approach that is non-price competition.
Price stabilization often is the goal in industries where products are highly standardized and in beverage
industry, products are standardized so beverage industry tries to attempt price stabilization.

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PROMOTION PLANNING
Promotion is any form of communication used to uniform, persuade and / or remind people about
organizations or individual’s goods, services, image ideas, community involvement, or impact on
society.
Promotion planning is a systematic decision making relating to all aspects of an organizations or
individual’s communication efforts.
The Importance of Promotion
Promotion is a vital part of marketing. “Word of mouth communication” occurs when people state
opinions to others. Without sustained positive word of mouth it is difficult for a company to succeed.
For Pepsi Cola, people have sustained positive word of mouth.
Pepsi Cola also believed on the value of promotion as:
 Establishes an image such as prestige, discount or innovative for the company and its goods and
services.
 Communicates features of goods and services.
 It creates awareness for new goods and services.
 It can reposition the images or uses of faltering goods and services.
 It generates enthusiasm from channel members.
 It explains where goods and services can be purchased.
 It can persuade consumers to trade up from one good or service to a more expensive one.
 It alerts consumers to sales.
 It justified the prices of goods and services.
 It reinforces loyal consumers.
Types of Promotion
Four types of promotion are:
 Advertising
 Publicity
 Personal selling
 Sales promotion

Pepsi Cola applied all these four types of promotion.

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Advertising
It is paid non-personal communication regarding goods, services, organizations, people, places and
ideas that in transmitted through various media by business firms, government and other nonprofit
organizations and individuals who are in some way identified in the advertising message as the sponsor.
The message in generally controlled by the sponsor.
Pepsi Cola also use these following advertising medium, daily newspaper, weekly newspaper
commercial television, cable television, magazines, Radio business publication, and transmitters.
The basic advertising themes are the product, consumer, and / or institutional appeals. Pepsi Cola use
“The Consumer Related Theme”, in which good or service uses explained cost benefits of good or
service shown, emphasis on how good or service helps consumer, threatening situation & incentives
given to encourage purchases.
Publicity
It is non-personal communication regarding goods, services, organizations people, places and ideas that
is transmitted through various media but not paid for by an identified sponsor. The message is generally
controlled by the media.
Pepsi Cola also promote its products by using this tool that is publicity, of promotions.
Personal Selling
Personal selling uses one to one interactions with buyers. Sales promotion includes paid supplemental
promotion efforts.
Selling in stressed when orders are large, consumers are concentrated items are expensive, and service is
required. Selling has limited audience high costs per customers, and a poor image. A manager must
oversee personal selling functions.
Sales person compensation can take one of three general formats: Straight salary, straight commission or
a combination of salary and commission or bonus.
Under a “straight salary plan”, a salesperson is paid a flat amount per hour week month or year. The
advent ages are that both selling and non-selling tasks are specified and controlled, there is security for
sales people, and expenses are known in advance. The disadvantages are the Low sales force incentive
to increase sales expenses not tied to productivity, and continuing costs even if there are low sales order
takers are usually paid straight salaries.
With a straight commission plan a sales purser’s earnings are directly related to sales, profits or some
other type of performance. The commission rate is often keyed to a quota, which is productivity standard

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for the salesperson. A quota can be based on total sales, total profit, customers serviced, products sold or
another criterion. The advantages of a strength commission plan are the motivated sales people no fixed
sales person compensation costs and expenses tied to productivity. The disadvantages are the lack of
control over non-selling tasks performed the instability of a firm’s dollar expenses and employer
earnings, and the risk to employees.
To obtain the advantages of both salary and commission oriented methods, many firms use elements of
each is a “combination compensation plan”. Such plans balance company control, flexibility, and
employee incentives. Sometimes bemuses are stipulated for outstanding individual or company
performance.
Pepsi cola use combination compensation plan.
Pepsi cola’s supervision encompasses four aspects of sales management motivating sales personal,
measuring performance, completing non selling tasks and initialing behavior changes.

Sales Promotion
Sales promotion efforts are greater now than ever before. Many firms are looking for any competitive
edge they can get and this increasingly involves some kind of sales promotion. The various from of sales
promotion are none more acceptable to firms and consumer then in the past.
Today more consumers look for sales promotions before buying, and channel members are putting more
pressure on manufactures for promotions. During economic downturns, even more consumers are
interested in value oriented sales promotion. Because of rising costs, advertising and personal selling
have become more expensive in relation to sale promotion.
Sales promotion lures customers, maintains loyalty, creates excitement, is often keyed to patronage and
appeals to channel members. Sales promotion may hurt image, cause consumers to wait for special
offers, and shift the focus from the product Pepsi cola offer for consumer “the crown schemes”. Is it has
been given Mercedes to one consumer and before Pepsi Cola up till now not other its competitors did
propose such big offer. Investment by Pepsi Cola in market is very high.
For retailers, the company use tools of trade and has been provided refrigerator to 15,000 shops so that
they exclusively sell Pepsi brand. This company has also provided 10,000 litter racks to shops, 1000
bottle racks to shops 20,000 shops signage (boards etc) 5,000 ice chest in rural areas. The company also
provides cash on credit Rs. 1000 to its financially needed shops.
Some recently offerings by the SHAMIM & Co. to promote its products to consumers, as sales
promotion by shell and Pepsi cola on purchasing of twenty litters “Super Petrol”, one litter Pepsi bottle

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will be free. On Eid event, in holiday inn, 1.5 litters Pepsi and one cake has been given to each
consumer. Pepsi cola also provide such offers as Dubai’s ticket, price discount as in holy Ramdan
month, sale Rs. 5. On 1.5 liter. In Abdullah center, Allahdin, in Tusso shop, help in shop board.
SHAMIM & Co. don’t want to leave aggressive policies against its competitors in which main
competitor is coca cola and in others one RC Cola, double cola local drinks, and to promote its products.
On the shop board of Tusso, company has to bear cost more than 200000 to maximum display of
product, company also investing more and more so that it can compete with competitors. Due to
availability of fresh fountain machines, the company also promoting its products in various areas due to
this sales promotion, they have increased their sales as compared to last year.

DISTRIBUTION PLANNING
Distribution planning involves movement and ownership in a channel of distribution, which consists of
channel members. Middlemen are channel intermediates distribution arrangements very widely. The
choice of a channel is very widely. The choice of a channel is quite important.
Channel of distribution, which is comprised of all the organizations or people involved in the
distribution process those participating in the distribution process are known as channel members and
may include manufacturers, service providers, wholesalers, retailers, retailers, marketing specialists, and
/ or consumers. When the term middlemen are used, it refers to wholesalers, retailers, and marketing
specialist (such as transportation firms) that are acting in their roles as intermediaries between
manufactures / service providers and their consumers. A middleman is an independent business concern
that operates as a link between producers and ultimate consumers or industrial users. Middlemen can
perform channel functions and reduce costs, provide expertise, open markets and lower risks. The
sorting process coordinates the goals of manufacturers and consumers. Channel choice depends on
consumers, the company, the product, competition, existing channels and legalities. “Distributions
management of the flow of products from manufacturer our customers and from warehouse to retailers,
involving the storage and transportation of products”. A successful organization is that which can
distribute its products to their customers at the right time and the right place. SHAMIM & Co. has
efficient distribution system because it has divided the whole area into different regions and has different
distributors for performing their activities in these regions.
All the activities related to distribution and sales is computerized and whole computer section ahs been
made for this purpose. The process for distribution is given below:

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First of all distributors require filled bottles and came up with empty bottles. Slip is made for this
purpose on which no. of empty bottle, date, name of distributor etc. are recorded. Distributors go to the
computer section where all the credit and debt entries are checked. Computer operator checks that how
much credit will be given to the distributors according to company policy. After this distributor take the
slip and go to warehouse for supply of filled bottles.
There are some salesmen at each distribution center. Certain area has been assigned to each salesman.
The concerned sales-man fulfills the orders of his customer’s e.g. the retailers who purchase the bottles
from them. To meet the urgent demand certain level of safety stock is also kept at each distribution
center especially in their peak season and on the special days such as Eid days.
In a direct channel the manufacturer performs all functions. An indirect channel uses independents using
exclusive, selective or intensive distribution depends on objectives, middlemen, customers and
marketing.
Pepsi Cola use intensive distribution as it widespread market coverage, channel acceptance volume sales
and profits middlemen of Pepsi Cola, many in numbers, all types of outlets final customers of Pepsi
Cola many in numbers, connivance, oriented. Pepsi Cola’s marketing emphasis or mass advertising,
nearby location, items in stock. Wholesaling is the buying / handling of merchandise and its resale to
organizational buyers wholesalers provide functions ranging from distribution to risk taking.
Wholesalers have obligations to their suppliers and to their customers.
SHAMIM & Co. has 140 distributors in whole Multan franchise.
Retailing, the last stage in w channel, includes the activities in selling to final consumes.
Manufacturers, importers, and wholesalers act as retailers when they sell products directly to the final
consumers. Retailing is an important aspect of distribution because of its impact on the economy, its
functions in the distribution channel, and its relationships with suppliers.
In this franchise of Pepsi cola, SHAMIM & COMPANY has no. of retailers more then 30,000.
Management of Shamim & Co. knows this thing that retailers are more cost conscious. Due to this
reason, this company offers to retailers, wristwatch on buying of ten crates and on purchasing two crates,
the company gives them coupons. For waking their performance effective, the management also offered
discounts to them.

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Market segmentation
Dividing a market into distinct groups of buyers with different needs, characteristics, or behavior who
might require separate products or marketing mixes is called market segmentation.
Pepsi cola segments its products as for people of having different tastes as for example, team, Pepsi,
Miranda and 7-up. Pepsi cola is offering these products so that different needs of consumers fulfill
markets consist of buyers, and buyers differ in one or more ways.

Levels of market segmentation

Mass marketing
In which mass producing, mass distributing, and mass promoting about the same product in about the
same way to all consumers.

Segment marketing
In which isolating broad segments that make up a market and adopting the marketing to match the needs
of one or more segments.

Niche marketing
Focusing on sub-segments or niches with distractive trails that may seek a special combination of
benefits.

Micro marketing
The practice of tailoring products and marketing programs to suit the tasks of specific individuals and
location include local marketing and individual marketing.

Local Marketing:
 Tailoring brands and promotion to the needs and wants of local customer groups
 Individual marketing: Tailoring products and marketing programs to the needs and
preferences of individual customers also labeled “markets-of-one marketing” and “one-to-
one marketing”.
Pepsi cola apply segment marketing level of market segmentation.

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Target market is a set of buyers sharing common needs or characteristics that the company decides to
service. According to them, from seven to eight years, new generation is their target market.
But as consumers perceived that for their each product, target market is different, for Miranda, children
are their target market. For 7-up, usually patients use this product. For Team, Pepsi new generation is
their target market.
Product position
The way the product is defined by consumers on important attributes the place the product occupies in
consumer’s mind relative to competing products. Consumers considered Pepsi cola as on top, no 1
position. 95% people are brand loyal of Pepsi cola. To maintain its position the management of Pepsi
cola use management of Pepsi cola use aggressive polices to maintain its position.

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Chapter No 5

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SWOT ANALYSIS
Strengths
 Strong image of PEPSI in consumer’s mind
 In time service of supplies and technical assistance
 More installation of post mix machine

Weaknesses
 No advertisement budgets for post mix.
 No signage’s of post mix in the market
 No promotional activities in post mix.
 No availability of spare parts.
 No proper workshop for post mix.

Opportunities
 Opening of new outlets
 Strong consumer commitment with Pepsi.

Threats
 Coca- Cola is on its way to get market share

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RECOMMENDATIONS FOR THE COMPANY.

Proper hierarchical system
The biggest problem we found in the organization was the lack of a proper
System which is immensely important for such an organization.
This is a typical Pakistani family business where the owner is making the
Decisions all the time.
There is no succession planning, as it is apparent from the hiring of the production
Manager from outside.
Proper system of reporting
There was no proper system of communication as who is to report to whom and who is responsible of
what. If a simple technical worker encounters a problem in the plant or any part of the equipment is
broken, he at once rushes to the production manager as what to do. This is clear that they have no proper
reporting system as to deal with the broken part of the equipment is not the job of the production
manager.
There must be clearly defined levels of communication. The technical worker must report to his
immediate supervisor. If that supervisor is unable to solve the problem then the official next to him
should be consulted and be proceeded in the same pattern. The matter will reach the production manager
but in a systematic way. So company needs a proper communication and reporting system. It may also
help in reducing rather eliminating false reporting.
We see that when the new production manager was hired, he, for implementing new techniques, gave
lectures to the employees and also recruited new ones. So there is lack of training of the employees in
the organization.
Generally Pepsi International has manuals for the managers that describe the standard procedures and
typically called as “THE PEPSI WAY”. These are the guidelines, which must be passed on the
employees as how the work is to be done. What happened in the past is that the managers kept hiding
these manuals from the employees and placed them under lock and key. The current production manager
has taken an important step as he is preparing notes from these manuals and passing them on to the
employees. But still it is not enough. Because the plants of the factory work in mistake at any process
can cause a serious problem for the other plant, which may lead to a severe mishap for the whole
production. So in this way the employee training has got the significant

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Importance.
For corrective action following steps lead to success for the organization:
 Periodic training programs
 Classes for unskilled persons
 Updating of skills of the employees.

Performance appraisal
The performance appraisal system in a manufacturing organization is a very tricky job. For example
evaluating the performance of one shift that has done the maintenance of the plant should be treated as
separate from the performance of the employees in the next shift that has got higher production. The
reason is that the second shift might be having less efficiency than the previous one and the credit goes
to the second shift.

The previous shift workers should be rewarded more than the next shift because they had done the
maintenance and kept the plant in working condition. The second shift workers just have capitalized on
the work of the previous shift workers. That’s why the performance evaluation is very important as it
directly deals with the motivation of the employees. If the employees feel that they have not been
rewarded according to their jobs, they may show little or no involvement in their tasks and may indulge
in activities that often hinder the efficiency of the production unit.
They mighty start
 Making groups
 Making false reporting
 Try to create obstacles for others
For this reason the company needs specific performance standards for specific tasks.
Employee Motivation
Whenever someone talks about motivating the employees, it is commonly said, “Don’t forget the money
consideration”. So, apart from motivation through training for the work, the employees must be
rewarded with proper reward and compensation systems.
The company is also lacking in this area. Getting rewards especially when it is in
the form of money or cash motivates the employees.

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So we emphasize on proper reward and compensation system and a fair level of salaries for all the
employees in the factory. Salaries were stagnant due to the stagnant production for the last
15 years. As the production has gone up and it is just due to the employees so the salaries of
the employees must also be raised.

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CHAPTER NO 6
ANNAXURE

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Ratio analysis of SCL

Liquidity Ratios

Current Ratio

Definition
Current ratio measures the number of times company’s current assets cover its current liabilities. The
higher the ratio, the greater is the company’s ability to meet its short term obligation as they come due.
Current ratio is calculated by dividing current assets by current liabilities.

Formula:
Current Ratio = Current Assets / Current Liabilities
Working

Year 2013 Year 2014 Year 2015

53555257 / 27574979 30685969 / 30783705 47187596 / 46468984
= 1.94 times = 0.99 times = 1.01 times

Interpretation
By the analysis of current ratio of the company, we analyze year 2013 has very strong position and has
more current assets to cover the current liabilities. Year 2014 has not good position, but in year 2015, it
is better position as compared to year 2014.

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Acid Test Ratio

Definition
This ratio measures Company’s liquidity position. It can be computed by the following formula
Formula:
Acid Test Ratio = Quick Assets / Current Liabilities
Working
Quick Assets = (Current Assets – (inventory + prepaid expenses)
Current liabilities = Bank borrowings + Trade & other payables
Year 2013 Year 2014 Year 2015
17955511 / 27574979 17933386 / 30783705 39996732 / 46468984
= 0.65 times = 0.58 times = 0.86 times

Interpretation
By the analysis of this ratio, we observe year 2013 has good position as compared to year 2014 and year
2015 has better position as compared to year 2014 and 2015.
Working Capital
Definition
Working capital is the excess of current assets over current liabilities. It is the amount of current asset
after deducting the current liabilities which represents a margin of safety that is a claim of protection for
the current creditors. It is calculated by following formula
Formula:
Working

Working Capital = Current Assets – Current Liabilities

Year 2013 Year 2014 Year 2015
53555257 – 27574979 30685969 – 30783705 47187596 – 46468984
= 25980278 = (97736) = 718612

Interpretation

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By the analysis of this ratio, we observe year 2013 has strong position because current assets are more
than current liabilities. In year 2014, it has bad position as compared to year 2015. In year 2015, it has
little bit better position as compared to year 2014, but not well enough as compared to
year 2013.
Leverage Ratio
Debt Ratio
Definition
Debt ratio shows the fraction of company’s assets that is financed by debt. Creditors of the company
would generally like this ratio to be low. It is calculated by the following formula
Formula:
Debt Ratio = Total Debt / Total Assets
Total Debt = Total Liabilities
Working
Year 2013 Year 2014 Year 2015
80471457 / 80471457 41240419 / 41240419 60455193 / 60455193
= 1% = 1% = 1%

Interpretation
By the analysis of this ratio, we observe that there is same position in all the three years.
Debt/ Equity Ratio
Definition
It includes that what proportion of equity and debt is used by the company to finance its assets. It is
calculated by the following formula
Formula
Debt /Equity Ratio = Total Debt / Total Equity
Working
Year 2013 Year 2014 Year 2015
80471457 / 5215 41240419 / 1456714 60455193 / 4986209
= 1543.07 % = 28.31 % = 12.22 %

Interpretation

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By the analysis of this ratio, we observe in year 2013, debt is very high and equity is low. In year 2014,
it has better position as compared to year 2013 and in year 2015, it has better position as compared to
both year 2013 & 2014.

Debt to Tangible Net worth Ratio

Definition
This ratio represents the capital contributed by the creditors to capital contributed by owners. It is
calculated by the following formula.
Formula
Debt to Tangible Net worth Ratio = Total Liabilities / (Shareholder’s Equity – Intangible Assets)
Working
Total Liabilities = Long Term Debt + Short Term Debt
Share Holder’s Equity = Share Capital + Un-appropriated Profit + Share Deposit Money.

Year 2013 Year 2014 Year 2015

80471457 / (52150 – 0) 41240419 / (1456714 – 0) 60455193 / (4986209 – 0)
= 1543.07% = 28.31% = 12.22%

Interpretation
By the analysis of this ratio, we observe in year 2013 has not good position as compared to year 2014. In
year 2015, it has better position as compared to year 2013 & 2014.

Total Capitalization Ratio

Formula:
Total Capitalization Ratio = Long term Debt / Equity + Fixed Liabilities
Note: As Shamim & Co. (PVT) LTD has not taken any type of debt from financial institution; hence
this ratio will not apply here.

Time Interest Earned

Formula:
Time Interest Earned = EBIT / Interest Expense

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Note: As Shamim & Co. has not taken any loan from financial institutions, so this ratio is not applicable here.

Profitability Ratios
Net Profit Margin
Definition
This ratio refers to the measure of profitability. It measures how much of every rupee of sales a company
actually keeps in earning. It is calculated as follows:
Formula:
Net Profit Margin = Net Profit after Tax / Net Sales *100
Working
Net income = Profit after taxation (gross profit – operating expenses – other income)
Net Sales = Gross profit + cost of sales
Year 2013 Year 2014 Year 2015
(947850) / 105917252*100 456714 / 110417221 *100 3529495 / 151852774 * 100
= (0.89)% = 0.41% = 2.32%

Interpretation
If we observe this ratio of the company, then it clear that in year 2013 company suffers loss and in year
2014, company earns minor profit and in year 2015, company has better position of profit as in year
2014.

Return on Assets
Definition
It is ratio of how profitable company is relative to its total assets. It shows of how company using its
assets to generate profit. It is calculated by the following formula
Formula:
Return on Assets = Net Income / Total Assets
Total Assets = (Fixed Assets + Current Assets)
Working
Year 2013 Year 2014 Year 2015
(947850) / 80471457 456714 / 41240419 3529495 / 60455193
= (0.01) % = 0.01 % = 0.05%

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Interpretation
By the analysis of this ratio of company, it has not get profit in year 2013, it means its assets are not
generating profit and in year 2014, it is just better than year 2013 and in year 2015, it has better position
than the previous year.
DuPont Return on Assets
Definition
This ratio developed by DuPont and it is calculated by the following formula
Formula:
DuPont Return on Assets = (Net Profit / Net Sales) (Sales / Total assets) (Total assets / Total
Equity)
Working
Year 2013 Year 2014 Year 2015
= (-947850 / 105917252)* (456714 / 110417221)* (3529495 / 151852774) *
(105917252 / 80471457) (110417221 / 41240419)* (151852774 / 60455193) *
*(80471457 / 52150) (41240419 / 1456714) (60455193 / 4986209)
= - (0.0089) ( 1.3162 ) (1543.07) = (0.0041) (2.67) (28.31) = (0.023) ( 2.511) (12.124)
= -18.07 = 0.3099 = 0.700%

Interpretation
By the analysis of this ratio of company, we observe that in year 2013, it has worst position. In year
2014, it has better than previous year and in year 2015 it has better position as compared to both
previous years 2013 & 2014.

Operating Income Margin

Definition
This ratio shows the company’s operational efficiency. It is measurement of what proportion of
company’s revenue is left after paying the selling and administrative expenses and other operating
expenses. It is calculated by following formula.
Formula

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Operating Income Margin = Operating profit / Net sales *100

Working
Year 2013 Year 2014 Year 2015
-418264 / 10517252 *100 1008800 / 110417221*100 4288759 / 151852774*100
= -0.39% = 0.91% =2.82%

Interpretation
By the analysis of this ratio, in year 2013 company suffers loss and in year 2014 it gains minor profit
and in year 2015, company has earned better profit as compared to year 2013 & 2014.
Return on Operating Assets
Definition
It is ratio which shows how company is efficient in earning from operating assets relative to net income.
It is calculated by following formula:
Formula
Return on operating assets = Net Income / Operating assets *100
Working
Year 2013 Year 2014 Year 2015
-947850 / 26916200 *100 456714 / 10554450 *100 3529495 / 10189338
= -3.52% = 4.32% = 34.63%
Interpretation
By the analysis of this ratio of the company, it shows that in year 2013, company has bad position and in
year 2014, it has better position as compared to year 2014. But in year 2015, it has good position as
compared to previous years 2013 & 2014.

Return on Total Equity

Definition
It shows of what amount the company earns from owner equity. It is calculated by the following
formula:
Formula
Return on Total Equity = Net profit / Equity *100
Working

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Year 2013 Year 2014 Year 2015

-947850 / 52150 *100 456714 / 1456714 *100 3529495 / 4986209 *100
= -1817.54% = 31.35% = 70.78%

Interpretation
By the analysis of this ratio, in year 2013 company has bad position of equity and in year 2014 it has
better position than year 2013. In year 2015, company has best position as compared to year 2013 &
year 2014.
Gross Profit Margin
Definition
It shows the company’s financial health by enlightening the proportion of earnings after deduction of
cost of goods sold. It is calculated by the following formula:
Formula
Gross Profit Margin = Gross Profit / Net Sales *100
Working
Gross profit = sales - cost of sales
Net Sales = Gross profit + cost of sales
Year2013 Year 2014 Year 2015
299372 / 105917252 *100 8906662 / 110417221 *100 15350403 / 151852774
= 2.82% = 8.06% = 10.10%
Interpretation
By the analysis of this ratio of the company, we observe that company has earned gross profit of ratio
2.82%. But in year 2014, it has earned better gross profit as compared to year 2013. In year 2015, it has
best position of gross earnings as compared to year 2013 & year 2014.

Activity Ratios
Total Assets Turnover
Definition
This ratio measures the efficiency of the company’s use of its assets in generating revenue. It is
calculated by the following formula
Formula
Total Asset Turnover = Net Sales / Total Assets

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Working
Net Sales = Gross profit + cost of sales
Total assets = Fixed assets + Long term assets

Year 2013 Year 2014 Year 2015

105917252 / 80471457 110417221 / 41240419 151852774 / 60455193
= 1.31 Times = 2.67 Times = 2.51 Times

Interpretation
By the analysis of this ratio, we observe that in year 2013, its assets turn over is 1.31 times which is less
than asset turn over in year 2015 which is 2.67 times. In year 2015, the assets turn over is 2.51 times.
However, best asset turnover is in year 2014 as compared to year 2013 and year 2015.
Fixed Asset turnover
Definition
This ratio shows that how company is efficient in using fixed assets to generate revenue.
Formula
Fixed Assets Turnover = Cost of Sales or Sales / Fixed Assets
Working
Year 2013 Year 2014 Year 2015
105917252 / 26916200 110417221 / 10554450 151852774 / 13189338
= 3.93 Times = 10.46 Times = 11.51 Times

Interpretation
By the analysis of this ratio of company, Fixed Asset turnover is best in only year 2014 which is strong
as compared to year 2013 & year 2014.

Market Ratios
Dividend per Share
Formula
Dividend per Share = Dividend amount / Number of equity Shares
Note:

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As Shamim & Co. (PVT) LTD is not listed company, hence it does not issue shares in the market.
Therefore this ratio is not applied here.
Earnings per Share
Formula
Earnings per Share = Net income for common shareholders / No. of common Shares outstanding
Note:
As Shamim & Co. (PVT) LTD is not listed company, hence it does not issue shares in the market.
Therefore this ratio is not applied here.
Price / Earnings Ratio
Formula
Price / Earnings Ratio = Market Price per Share / Earning per Share
Note:
As Shamim & Co. (PVT) LTD is not listed company, hence it does not issue shares in the market.
Therefore this ratio is not applied here.

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Conclusion

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