SUMMER TRAINING PROJECT REPORT ON GROWING MARKET OF COLD DRINKS IN JAMSHEDPUR REGION

A Report submitted to Ishan institute of Management& Technology, Greater Noida, as a partial fulfillment of full time Post Graduate Diploma in Management.

SUBMITTED TO: DR. D.K. Garg Chairman IIMT.GR.NOIDA

SUBMITTED BY: Raghwendra kumar ENR NO:-BM 15057 BATCH:-15th

Ishan Institute of Management & Technology 1 A, Knowledge Park-I, Gr. NOIDA, District; G.B. Nagar (U.P.) Website: www.ishanfamily.com
E-MAIL: STUDENT@ISHANFAMILY.COM

PREFACE
This Project Report has been completed in Partial fulfillment of my management Program, Post Graduate Diploma in Business Management (PGDBM) in the company SMV Beverages {JAMSHEDPUR}. The objective of my project was TO STUDY THE GROWING MARKET OF COLD DRINKS IN JAMSHEDPUR REGION. The details mentioned in this report are based on real situations. Since the reader would like to know the general detail of two cola giants. Therefore a chapter includes a discussion on theoretical aspects of comparative study and its application for the industry in marketing is also include. Further to help the reader in understanding the findings, graphical representation, conclusions and suggestions are also includes, which very much helps SMV Beverages, Jamshedpur to know where he stands in the soft drinks market. What is the growing market of cold drinks? Training is a period in which a student can apply his theoretical knowledge in practical field. Basically practical knowledge and theoretical knowledge have a very broad difference. Theoretical knowledge is the fundamental weapon for any management student. As a student of management, apart from theoretical studies we need to get a deeper insight of the practical aspects of theories by working in an organization. The training session helps to know about the working process in the organization. It helps to know about the organizational management and discipline, which has its own importance. To achieve professional competence, manager ought to be fully occupied with theory and practical exposure of management. A comprehensive understanding of the principle increases their decision-making ability and sharpens their tools for this purpose. So, this training has high importance as to know how both the aspects are applied together. Theoretical knowledge of a person remains dormant until it is used and tested in the practical life. The training has given to me the chance to apply my theoretical knowledge that I have acquired in my classroom to the real business world. I completed my summer training project in which I involved successful application of theories. In spite of few limitations and hindrance during the summer training, I found that the work was a challenge and fruitful. This summer training project has enabled my capability in order to manage business effectively. I frequently hope that this project report would be considerable help to the management for developing strategies in those areas.

ACKNOWLEDMENT
This project has been prepared as a part of an internship required during the completion of PGDBM programmed at IIMT, Gr. Noida (U.P). I was involved with SMV Beverages (Jamshedpur) for a period of 8 weeks, and I came across a lot of people who put in their time and effort towards acclimatizing me to the workings of their organization. I express my thanks to my project guide Mr. Arbind tiwari (Marketing Development Manager, Jamshedpur) and co-guide Mr. Ravi Bhaskar (Customer executive) who was there to introduce me to the idea of Marketing and what go behind it. Also under his guidance and leadership I was able to enhance my managerial as well as inter-personal skills. I would also like to thank him for his immense support and guidance in the selection of the project, its study and preparation of the report. I would also like to wish a special thanks to my Honorable Chairman Dr. D. K. Garg, without whose approval this project would have been a sdistant dream. Last, but definitely not the least, I express my gratitude to the entire staff of SMV Beverages (Jamshedpur). These past 8 weeks were of utmost importance as they added value towards my path of knowledge. I would like to end this acknowledgement by thanking the customers, distributor people at large with whom I have interacted during the course of my training. I hope this report will be special interest to the marketing students, who are on look for such real life situations beyond their classroom studies.

DECLARATION This summer Traning project on Growing market of cold drinks in Jamshedpur region under the guidance of Mr. Arvind tiwari(MDM,SMV BEVERAGES)is an original work done by me. This is the property of the institute & use of this report without prior permission of the institute will be considered illegal & actionable.

Date: Raghwendra kumar Enr.No-BM 15057

Signature:

TABLE OF CONTENTS
Subjects Executive Summary Objective Introduction Literature Review
History of the soft drinks

Page no 7 8 9-10 11-12 13 14-30 31-32 33 34-37 38-45 46-48 49-58 59-62 63-65 66-70 70-97

History of pepsico Soft drinks industries in india Vision and mission Pepsico slogan Achievements of pepsico Market growth of pepsi in last 5 yrs Marketing strategy Product life cycle Life stage of beverages industries of pepsico Competition History of coca-cola  History in india  Product and services  Mission, vision and values  Awards and achievements  Products Introduction of soft drinks in Jamshedpur The product profile & production process Marketing activities of SMV beverages Distribution channels of SMV beverages in Jamshedpur region Distribution channels of pepsi in Jamshedpur region Advertisements Analysis and interpretation Merchandising and market share of pepsi and coke Data analysis and interpretation
5

98-105 106-118 119-126 127-134 135-141 142-146 147-157 158-166 167-173

Analysis of Dealer questionnaire Operational problems Conclusion Swot analysis  Strengths  Weaknesses  Opportunities  Threats Findings Limitations Suggestions My experience with SMV beverages & job profile Leanings Achievements Annexure Bibliography Words of thanks

174-175 176-177 178

179 180 181 182 183 184 185-187 188 189-190 191-192 193-195 196 197

EXECUTIVE SUMMARY It means application of theoretical understanding applied into practical world of business. It helps the manager to think about what they should do. Summer training or internship training provides opportunities to apply this theory into real business. Marketing is a very crucial activity in every business organization. Every product produced within an industry has to be marketed otherwise it will remain as unsold stock, which will be of no value. I have realized this fact after completion of my summer training project. During my training my objective of project was To study the Growing market of cold drinks in Jamshedpur region. There are other than this I have performed marketing activities which includes demonstration of Schemes and Service in order to increase its sales & demand. The results of the study reveal that Market activation is a fundamental tool in the promotional activities of any organization. In the Market Activation we apply all the marketing activation material for the advertisement of the products and creates brand image for the company. These activation elements also play a vital role in the launch of any new scheme and product. All the advertising and promos are done with the help of these marketing elements.

Objective :
1) The objective of joining PepsiCo company was to get associated with a Multi-National Company (MNC) and to gain the insight of the FMCG industry. This beverage industry is a consumer goods industry. In the current scenario FMCG industry is on the boom. This is an evergreen industry. 2) To study the impact of market activation on consumers and finding out the impact of marketing activation material in general trade through running various shorts of promos at the time of any new product launch and scheme. 3) To study how to launch any new product and scheme in the competitive market. 4) To understand the consumer behavior. 5) To understand how advertisement takes place. 6) To understand the fundamental application of FMCG industry at the time of promotional activity of products. 7) To study the evolution, function, importance and legal frame work of the Indian Beverage Industry. 8) To make sustainable strategy to ensure companies sales growth. 9) To understand the display of merchandising material to create visual appeal. 10) To provide a framework amongst various channels for availability and visibility of PepsiCo products. 11) To trigger consumers inputs to purchase/consume PepsiCo products.

INTRODUCTION
The following report titled Growing market of cold drinks in Jamshedpur region is prepared after studying market of Jamshedpur. The area was assigned by Mr. Arvind Tiwari (MDM) Jamshedpur. The purpose of the study was to get an insight into the distribution channel, its working as well as consumers view regarding PepsiCo products and to know how merchandizing helps in selling and the importance of plano-graming. All of these form an important place in success of any product. Through the survey I came to know about distribution of PepsiCo products. Jamshedpur has been divided in several areas which are covered by different agencies. In Jamshedpur 24 agencies are present. I was working on one of them, named Sri Hari Trader. Sri Hari Trader is having third largest distribution area. Advertisement plays an important role in selling a product. Those retail outlets having good ads had higher sales compared to the outlets having no ads. Pepsi ads can be seen in various parts of the city through banners, wall painting, greeting gates of Mirinda, 7up, slice, stand etc. These ads affect in retaining the consumers. India with a population of more than 100 crores is potentially one of the largest consumer markets in the world. With urbanization and development of economy, taste and interests of the people changes according to the advance nation. Marketing is about winning this new environment. It is about understanding what consumers wants a supplying its more efficiently and more conveniently. This consumer market may be identified as the market for product and services that are purchased by individuals as household for their personal consumption. Soft drinks is a typical consumer product purchased by individual primarily quench their thirst and also for refreshment. Different types of soft drinks are available in the market and more or less content of all soft drinks is same. The market of soft drink is facing a cut throat competition and many companies are floating in the market with their products with different brand names. In such a situation different factors which influence the people choice for soft drinks are taste, quality, images, easy availability and the product cost of advertisement. The Government of India has considered the soft drinks industries as Non-Essential. As a result the excise duty levied by the government on better soft drinks is very high. Thus in a country like India, where more than 50 % of the total population exists below poverty line, the consumer cannot afford such high price for soft drinks. As result the trading activities of the soft drinks industry are concentrated in and around
9

big cities and town where the purchasing power of population is considered comparatively high. Soft drinks industries in India has an annual sale of about 4,000 crores, with per capita consumption of soft drinks at a low of 7 bottle per annum ( even Pakistan has a per capita consumption of 14; in China and USA is more than 800 bottles) is due to price factor. So, marketing is both philosophy and technology. It is technology because it suggests ways and means for effective production and distribution of goods and service in the market to give maximum satisfaction to the consumer. The marketing manager is responsible for both determining and suitability of goods and services in the market to give maximum satisfaction to the consumer. The marketing manager is responsible for both determining and suitability of goods and services presented by the company to the market, and also determining about potential market and make better relation with retailer. In this regard the marketing management with have to apply to marketing technology in the conceptual philosophy of a system. It is the process of system analysis in the marketing management for effective research and can be defined, Systematic objective and exhaustive study of tasks relevant to any problem in the field of marketing. Beverage industry is one of the fast growing industries in India. It can be divided into two sections i.e. carbonated and non -carbonated. The carbonated drinks can be further classified into Cola, Lemon, Orange; Mango & Apple segments etc.Marketing includes all the activities like promotion, distribution, advertising etc. to fulfill the demands of all segments of consumers. Marketing is also convert social needs into profitable opportunities. So this topic provides all the essentials to the theoretical knowledge with practical knowledge and to inculcate the efficiency. It is also a requirement for the company to improve its service and product quality to achieve the ultimate goal. Marketing is about winning this new environment. It is about understanding what consumers wants a supplying its more efficiency and more conveniently. India where more than 50% of the total population exists below poverty line the consumer cant afford such high price for soft drinks. As a result the trading activities of the soft drinks industry are concentrated in and around big cities and town where the purchasing power of population is considered comparatively high. Soft drinks industries in India has annual sale of about 5000crores, with per capita consumption of soft drinks at a low of eight bottles per annum is due to price factor. So, marketing is both philosophy and technology.

10

LITERATURE REVIEW We are now in an era, which is witnessing a drastic change in the consumer preference Many Indian organizations have realized the importance of Marketing Management and new strategies are adopted during the marketing of the products. They have realized that continuous improvement is the key to excellence. This requires regular development of their systems, techniques and people. Of late, Indian companies have realized that competitive improvement through quality improvement in the field of marketing of the products by sales promotion, improving the distribution and many more elements of marketing mix can be achieved if they understand not only what various strategies can be used during marketing. Marketing management is creating a revolution in marketing of products and services providing to the market and consumers of the organization throughout the world. Marketing management is a powerful tool for achieving organizational goals and gaining competitive advantage. There are number of forces that make marketing an endlessly changing activity. PepsiCo is a world leader in convenient food and beverages, with revenues of about$43.521 billion and over 198000 employees. The company consist of the snack business of fritolay North America and fritolay international; the beverages business of pepsi-cola North America, Gatorade/ Tropicana North America and PepsiCo Beverages international; and quaker food products. PepsiCo brands are available in nearly 200 countries and territories. Many of PepsiCo brands are available in 200 countries and territories. Many of the PepsiCos brands name are 100 year old, but the corporation is relatively young. PepsiCo was founded in 1965 through the merger of Pepsi-cola & Frito lay. Tropicana was acquired in 1998 and the Pepsi merged with Quacker Oats Company, including Gatorade, in 2001. PepsiCos success is the result of superior products, high standards of performance, distinctive competitive strategies and the high integrity of the people. PepsiCo is a world leader in convenient foods and beverages, with revenues of about $25 billon and over 142,000 employees. The company Consist of the snack business of Frito-lay North America an and Frito lay international the beverage business of Pepsi-cola North America, Gatorade/Tropicana North America and PepsiCo Beverages international ; and Quaker food North America , manufacturer and marketer of ready to eat cereals and other foods products. PepsiCo brand are available in 200 countries and territories. Many of PepsiCos brand names are over 100 year old, but the
11

corporation is relatively young. PepsiCo was founded in 1965 through the merger of Pepsi-cola & Frito lay. Tropicana was acquired in 1998 and the Pepsi merged with Quicker Oats company, including Gatorade, in 2001. PepsiCos success is the result of superior products, high standards of performance, distinctive competitive strategies and the high integrity of the people.

12

HISTORY OF THE SOFT DRINKS

The history of soft drinks starts with the end of the last century. Its history dates back to the civil war in USA in 1860. At the time people were suffering from several diseases. Problem at that time was how to cure all those diseases since no remedy was present at that time. It was a big question for American people. In 1885, Mr. Jihn Palmwartion, who lived in Antonica, made a drink and registered it as French Wine Cola. In the starting the drink was made with mixture of Cocaine and Alcohol but later on it was converted and changed into a soft drink. Now it is named as CocaCola. A new brand named Pepsi-Cola came in the year 1887. Around 1984, the first branded soft drink came in the Indian market. This soft drink was named as Gold Spot. Parle Exports Pvt. Ltd. was the first Indian Company to introduce a Lemon soft drink, this drink was known as Limca and it was introduced in 1970s however, before this drink had introduced Cola Pepino which was withdrew in face of tough competition. In the year 1977, Coca-Cola left Indian market and this brought in an opportunity for various Indian companies to show their caliber. At this time, a new soft drink was introduced by Parle Products and this was named as Thumps-Up. This was a Coca-Cola drink which has a burnt sugar color. This drink was introduced with a slogan Happy Days Are Here Again. There was another company named Pure Drinks which introduced the soft drink named Campa Cola along with Orange and Lemon flavor. Just after this many more companies entered Indian soft drinks market. A soft drink named Double-7 had been introduced by a company Modern Bakers. Another company, Mohan Meakins also came with soft drink named Marry & Puckup. Mcdowell came with Thrill, Rush, Spirit. Previously there was no competition in the Indian soft drink market but with all these companies coming in the Indian market a huge competition was taking place with high voltage advertisement. But in the year 1988 Pepsi Cola was given permission to sell its soft drinks in the Indian market by the Government of India. Coca-Cola also came back in 1993.

13

HISTORY OF PEPSICO

Doc.Bradham PepsiCo, Inc. is one of the world's top consumer product companies with many of the world's most important and valuable trademarks. Pepsi-Cola Company division is the second largest soft drink business in the world, with a 21 percent share of the carbonated soft drink market worldwide and 29 percent in the United States. Three of its brands--Pepsi-Cola, Mountain Dew, and Diet Pepsi are among the top ten soft drinks in the U.S. market. The Frito-Lay Company division is by far the world leader in salty snacks, holding a 40 percent market share and an even more staggering 56 percent share of the U.S. market. In the United States, Frito-Lay is nine times the size of its nearest competitor and sells nine of the top ten snack chip brands in the supermarket channel, including Lay's, Doritos, Tostitos, Ruffles, Fritos, and Cheetos. Frito-Lay generates more than 60 percent of PepsiCo's net sales and more than twothirds of the parent company's operating profits. The company's third division, Tropicana Products, Inc., is the world leader in juice sales and holds a dominant 41 percent of the U.S. chilled orange juice market. On a worldwide basis, PepsiCo's product portfolio includes 16 brands that generate more than $500 million in sales each year, ten of which generate more than $1 billion annually. Overall, PepsiCo garners about 35 percent of its retail sales outside the United States, with Pepsi-Cola brands marketed in about 160 countries, Frito-Lay in more than 40, and Tropicana in approximately 50. When Caleb D. Bradham made a new cola drink in the 1890s, his friends' enthusiastic response realized him that he had created a commercially viable product. For the next 20 years, 'Doc' Bradham prospered from his Pepsi-Cola sales. Eventually, he was faced with a dilemma; the crucial decision he made turned out to be the wrong one and he was forced to sell. But his successors fared no better and it was not until the end of the 1930s that Pepsi-Cola again became profitable. Seventy years later, PepsiCo, Inc. was a mammoth multinational supplier of soft drinks, juices, and snack food. PepsiCo's advance to that level was almost entirely the result of its management style and the phenomenal success of its television advertising that we can easily see in between cricket matches and daily shows. The story started with the countless affords of Doc Bradham to create a cola drink similar in taste to Coca-Cola, which by 1895 was selling well in every state of the union. On August 28, 1898, at his pharmacy in New Bern, North Carolina, Bradham gave the name Pepsi-Cola to his most popular flavored soda. Formerly it was known as Brad's Drink, the new cola beverage was syrup of sugar, vanilla, oils, cola nuts, and other flavorings diluted in carbonated water. The enterprising pharmacist followed Coca-Cola's method of selling the concentrate to soda fountains; he sold the syrup in his drugstore, and then shipped it in barrels to the contracted fountain operators who added the soda water. He also bottled and sold the drink himself. In 1902 Doc Bradham closed his drugstore to give his full attention to its new business. The next year, he patented the Pepsi-Cola trademark. In the same year he ran his first advertisement in a local paper, and moved
14

the bottling and syrup-making operations to a custom-built factory. Almost 20,000 gallons of Pepsi-Cola syrup were produced in 1904. Bradham followed the successful methods of the Coca-Cola; he began to establish a network of bottling franchises. Entrepreneurs anxious to enter the increasingly popular soft drink business set themselves up as bottlers and contracted with Bradham to buy his syrup and sell nothing but Pepsi. With little cash outlay, Pepsi-Cola reached a much wider market. Bradham's first two bottling franchises, both in North Carolina, commenced operation in 1905. By 1907, Pepsi-Cola had signed agreements with 40 bottlers; over the next three years, the number grew to 250 and annual production of the syrup exceeded one million gallons. Pepsi-Cola continuously grew until World War I, when sugar, the main ingredient of all flavored sodas, was rationed. Soft drink producers were forced to cut back until sugar rationing ended. The war time set price of sugar--5.5 cents per pound--rocketed after controls were lifted to as much as 26.5 cents per pound in 1920. Bradham, like his rivals, he had two ways whether to stop production and sit tight in the hope that prices would soon drop, or stockpile the precious commodity as a precaution against even higher prices; he chose the latter way. But unfortunately for him the market was saturated by the end of 1920 and sugar prices plunged to a low of two cents per pound. Bradham never recovered from this loss. In a last effort, he enlisted the help of Roy C. Megargel, a Wall Street investment banker. Very few people, however, were willing to invest in the business and it went bankrupt in 1923. The assets were sold and Megargel purchased the company trademark, giving him the rights to the Pepsi-Cola formula. Doc Bradham went back to his drug dispensary and died 11 years later. Megargel reorganized the firm as the National Pepsi-Cola Company in 1928, but after three years of continuous losses he had to declare bankruptcy. That same year, 1931, Megargel met Charles G. Guth, a somewhat autocratic businessman who had recently taken over as president of Loft Inc., a New York-based candy and fountain store concern. Guth had fallen out with Coca-Cola for refusing the company a wholesaler discount and he was on the lookout for a new soft drink. He signed an agreement with Megargel to resurrect the Pepsi-Cola company, and acquired 80 percent of the new shares, ostensibly for himself. Then, having modified the syrup formula, he canceled Loft's contract with Coca-Cola and introduced Pepsi-Cola, whose name was often shortened to Pepsi. Loft's customers were wary of the brand switch and in the first year of Pepsi sales the company's soft drink turnover was down by a third. By the end of 1933, Guth bought out Megargel and owned 91 percent of the insolvent company. Resistance to Pepsi in the Loft stores tailed off in 1934, and Guth decided to further improve sales by offering 12-ounce bottles of Pepsi for a nickel--the same price as six ounces of Coke. The Depression-exhausted people of Baltimore--where the 12-ounce bottles were first introduced--were ready for a bargain and Pepsi-Cola sales increased dramatically. Guth soon decided to internationalize Pepsi-Cola, establishing the Pepsi-Cola Company of Canada in 1934 and in the following year forming Compania Pepsi-Cola
15

de Cuba. He also moved the entire American operation to Long Island City, New York, and set up national territorial boundaries for the bottling franchises. In 1936, Pepsi-Cola Ltd. of London commenced business. In 1936 Guths ownership of the Pepsi-Cola Company was challenged by Loft Inc. In a complex arrangement, Guth had organized Pepsi-Cola as an independent corporation, but he had run it with Loft's employees and money. After three years of litigation, the court upheld Loft's contention and Guth had to step down, although he was retained as an adviser. James W. Carkner was elected president of the company, now a subsidiary of Loft Inc., but Carkner was soon replaced by Walter S. Mack, Jr., an executive from the Phoenix Securities Corporation. Mack established a board of directors with real voting powers to ensure that no one person would be able to wield control as Guth had done. From the start, Mack's aim was to promote Pepsi to the hilt so that it might replace CocaCola as the world's best-selling soft drink. The advertising agency Mack hired worked wonders. In 1939, a Pepsi radio jingle--the first one to be aired nationally--caught the public's attention: 'Pepsi-Cola hits the spot. Twelve full ounces, that's a lot. Twice as much for a nickel too. Pepsi-Cola is the drink for you.' The jingle, sung to the tune of the old British hunting song 'D'Ye Ken John Peel,' became an advertising hallmark; no one was more impressed, or concerned, than the executives at Coca-Cola. In 1940, with foreign expansion continuing strongly, Loft Inc. made plans to merge with its Pepsi-Cola subsidiary. The new firm, formed in 1941, used the name Pepsi-Cola Company since it was so well-known. Pepsi's stock was listed on the New York Stock Exchange for the first time. Sugar rationing was even more severe during World War II, but this time the company fared better; indeed, the sugar plantation Pepsi-Cola acquired in Cuba became a most successful investment. But as inflation spiraled in the postwar U.S. economy, sales of soft drinks fell. The public needed time to get used to paying six or seven cents for a bottle of Pepsi which, as they remembered from the jingle, had always been a nickel. Profits in 1948 were down $3.6 million from the year before. In other respects, 1948 was a notable year. Pepsi moved its corporate headquarters across the East River to midtown Manhattan, and for the first time the drink was sold in cans. The decision to start canning, while absolutely right for PepsiCola and other soft drink companies made upset the franchised bottlers, who had invested heavily in equipment. Walter Mack was appointed company chairman in 1950, and a former Coca-Cola vice-president of sales, Alfred N. Steele, took over as president and chief executive officer, bringing 15 other Coke executives with him. Steele continued the policy of management decentralization by giving broader powers to regional vice-presidents, and he placed Herbert Barnet in charge of Pepsi's financial operations. Steele's outstanding contribution, however, was in marketing. He launched an extensive advertising campaign with the slogan 'Be Sociable, Have a Pepsi.' The new television medium provided a perfect forum; Pepsi advertisements presented young Americans drinking 'The Light Refreshment' and having fun. By the time Alfred Steele married movie star Joan Crawford in 1954, a transformation of the company was well underway. Crawford's adopted daughter, Christina, noted in her best-seller Mommie Dearest: '[Steele had] driven Pepsi into national prominence and distribution, second only to his former employer, Coca-Cola. Pepsi was giving Coke a
16

run for its money in every nook and hamlet of America. Al Steele welded a national network of bottlers together, standardized the syrup formula brought the distinctive logo into mass consciousness, and was on the brink of going international. In fact Pepsi-Cola International Ltd. was formed shortly after Steele's marriage. Joan Crawford became the personification of Pepsi's new and glamorous image. She invariably kept a bottle of Pepsi at hand during press conferences and mentioned the product at interviews and on talk shows; on occasion she even arranged for Pepsi trucks and vending machines to feature in background shots of her movies. The actress also worked hard to spread the Pepsi word overseas and accompanied her husband, now chairman of the board, on his 1957 tour of Europe and Africa, where bottling plants were being established. Steele died of a heart attack in the spring of 1959. Herbert Barnet succeeded him as chairman and Joan Crawford was elected a board member. Pepsi-Cola profits had fallen to a postwar low of $1.3 million in 1950 when Steele joined the company, but with the proliferation of supermarkets during the decade and the developments in overseas business, profits reached $14.2 million in 1960. By that time, young adults had become a major target of soft drink manufacturers and Pepsi's advertisements were aimed at 'Those who think young.' Al Steele and Joan Crawford had been superb cheerleaders, but a stunt pulled in 1959 by Donald M. Kendall, head of Pepsi-Cola International, is still regarded as one of the great coups in the annals of advertising. Kendall attended the Moscow Trade Fair that year and persuaded U.S. Vice-President Richard Nixon to stop by the Pepsi booth with Nikita Khrushchev, the Soviet premier. As the cameras flashed, Khrushchev quenched his thirst with Pepsi and the grinning U.S. Vice-President stood in attendance. The next day, newspapers around the world featured photographs of the happy couple, complete with Pepsi bottle. By 1963, Kendall was presiding over the Pepsi Empire. His rise to the top of the company was legendary. He had been an amateur boxing champion in his youth and joined the company as a production line worker in 1947 after a stint in the U.S. Navy. He was later promoted to syrup sales where it quickly became apparent that he was destined for higher office. Ever pugnacious, Kendall has been described as abrasive and ruthlessly ambitious, beleaguered Pepsi executives secretly referred to him as White Fang. Under his long reign, the company's fortunes skyrocketed. Pepsi-Cola's remarkable successes in the 1960s and 1970s were the result of five distinct policies, all of which Kendall and his crew pursued diligently: advertising on a massive, unprecedented scale; introducing new brands of soft drinks; leading the industry in packaging innovations; expanding overseas; and, through acquisitions, diversifying their product line. The postwar babyboomers were in their mid- to late teens by the time Kendall came to power. 'Pepsi was there,' states a recent company flyer, 'to claim these kids for our own.' These 'kids' became the 'Pepsi Generation.' In the late 1960s Pepsi was the 'Taste that beats the others cold.' Viewers were advised 'You've got a lot to live. Pepsi's got a lot to give.' By the early 1970s, the appeal was to 'Join the Pepsi people, feeling' free.' In middecade an American catchphrase was given a company twist with 'Have a Pepsi Day,' and the 1970s ended on the note 'Catch the Pepsi Spirit!' The Pepsi Generation wanted variety and Pepsi was happy to oblige. Company brands
17

introduced in the 1960s included Patio soft drinks, Teem, Tropic Surf, Diet Pepsi--the first nationally distributed diet soda, introduced in 1964--and Mountain Dew, acquired from the Tip Corporation, also in 1964. Pepsi Light, a diet cola with a hint of lemon, made its debut in 1975, and a few years later Pepsi tested the market with Aspen apple soda and On-Tap root beer. The company also introduced greater variety into the packaging of its products. Soon after Kendall's accession, the 12-ounce bottle was phased out in favor of the 16-ounce size, and in the 1970s Pepsi-Cola became the first American company to introduce one-and-a-half and two-liter bottles; it also began to package its sodas in sturdy, lightweight plastic bottles. By the end of the decade, Pepsi had added 12-pack cans to its growing array of packaging options. The company's expansion beyond the soft drink market began in 1965 when Kendall met Herman Lay, the owner of Frito-Lay, at a grocer's convention. Kendall arranged a merger with this Dallas-based snack food manufacturer and formed PepsiCo, Inc. Herman Lay retired soon thereafter but retained his substantial PepsiCo shareholding. The value of this stock increased dramatically as Frito-Lay products were introduced to Pepsi's nationwide market. At the time of the merger, key Frito-Lay brands included Fritos corn chips (created in 1932), Lay's potato chips (1938), Chee-tos cheese-flavored snacks (1948), Ruffles potato chips (1958), and Rold Gold pretzels (acquired by Frito-Lay in 1961). Doritos tortilla chips were introduced nationally in 1967. The addition of Frito-Lay helped PepsiCo achieve $1 billion in sales for the first time in 1970. That same year, the corporation moved into its new world headquarters in Purchase, New York. During the 1970s, Kendall acquired two wellknown fast-food restaurant chains, Taco Bell, in 1977, and Pizza Hut, in 1978; naturally, these new subsidiaries became major outlets for Pepsi products. But Kendall also diversified outside the food and drink industry, bringing North American Van Lines (acquired in 1968), Lee Way Motor Freight, and Wilson Sporting Goods into the PepsiCo empire. Overseas developments continued apace throughout Kendall's tenure. Building on his famous Soviet achievement, he negotiated a trade agreement with the U.S.S.R. in 1972; the first Pepsi plant opened there two years later. Gains were also made in the Middle East and Latin America, but Coca-Cola, the major rival, retained its dominant position in Europe and throughout much of Asia. By the time PepsiCo greeted the 1980s with the slogan 'Pepsi's got your taste for life!,' Kendall was busy arranging for China to get that taste too; production began there in 1983. Kendall put his seal of approval on several other major developments in the early 1980s, including the introduction of Pepsi Free, a non-caffeine cola, and Slice, the first widely distributed soft drink to contain real fruit juice (lemon and lime). The latter drink was aimed at the growing 7-Up and Sprite market. Additionally, Diet Pepsi was reformulated using a blend of saccharin and aspartame (NutraSweet). 'Pepsi Now!' was the cry of company commercials, and this was interspersed with 'Taste, Improved by Diet Pepsi.' On the Frito Lay side, meantime, the Tostitos brand of crispy round tortilla chips was introduced in 1981. In 1983 the company claimed a significant share of the fast-food soft drink market when Burger King began selling Pepsi products. A year later, mindful of the industry axiom that there is virtually no limit to the amount a consumer will buy once the decision to buy
18

has been made; PepsiCo introduced the 3-liter container. By the mid-1980s, the Pepsi Generation was over the hill. Kendall's ad agency spared no expense in heralding Pepsi as 'The Choice of a New Generation,' using the talents of superstar Michael Jackson, singer Lionel Richie, and the Puerto Rican teenage group Menudo. Michael Jackson's ads were smash hits and enjoyed the highest exposure of any American television commercial to date. The company's high profile and powerful presence in all of the soft drink markets--direct results of Kendall's strategies--helped it to weather the somewhat uncertain economic situation of the time. On only one front had Kendall's efforts failed to produce satisfactory results. Experience showed that for all its expertise, PepsiCo simply did not have the managerial experience required to run its subsidiaries outside the food and drink industries. A van line, a motor freight concern, and a sporting goods firm were indeed odd companies for a soft drink enterprise; and Kendall auctioned off these strange and ailing bedfellows, vowing never again to go courting in unfamiliar territories. With his house in excellent order, the PepsiCo mogul began to prepare for his retirement. He had bullied and cajoled a generation of Pepsi executives and guided them ever upward on the steep slopes of Pepsi profits. But he had one last task: to lead PepsiCo to victory in the Cola Wars. Hostilities commenced soon after the Coca-Cola Company changed its syrup recipe in the summer of 1985 and with much fanfare introduced New Coke. Pepsi, caught napping, claimed that Coca-Cola's reformulated drink failed to meet with consumer approval and pointed to their own flourishing sales. But serious fans of the original Coke were not about to switch to Pepsi and demanded that their favorite refreshment be restored. When blindfolded, however, it became manifestly apparent that these diehards could rarely tell the difference between Old Coke, New Coke, and Pepsi; indeed, more often than not, they got it wrong. In any event, the Coca-Cola Company acceded to the public clamor for the original Coke and remarketed it as Coca-Cola Classic alongside its new cola. Some advertising analysts believed that the entire 'conflict' was a clever publicity ploy on the part of Coca-Cola to demonstrate the preeminence of its original concoction ('It's the Real Thing!'), while introducing a new cola--allegedly a Pepsi taste-alike&mdash win the hearts of waverers. More interesting perhaps than the possible differences between the colas were the very real differences in people's reactions. Four discrete fields were identified by Roger Enrico and Jesse Kornbluth in their book, The Other Guy Blinked: How Pepsi Won the Cola Wars: the totally wowed (possibly caffeine-induced); the rather amused; the slightly irritated; and the distinctly bored. The latter group must have nodded off in front of their television sets when Pepsi took the Cola Wars beyond the firmament. 'One Giant Sip for Mankind,' proclaimed the ads as a Pepsi 'space can' was opened up aboard the U.S. space shuttle Challenger in 1985. Presumably, had a regular can been used, Pepsi-Cola would have sloshed aimlessly around the gravity-free cabin. This scientific breakthrough, together with the almost obligatory hype and hoopla, and more mundane factors such as the continued expansion in PepsiCo's outlets, boosted sales to new heights, and Pepsi's ad agency glittered with accolades. The debate persisted, at least within Coke and Pepsi corporate offices, as to who won the Cola Wars. The answer appeared to be that there were no losers, only winners; but
19

skirmishes would inevitably continue. D. Wayne Calloway replaced Donald M. Kendall as chairman and chief executive officer in 1986. Calloway had been instrumental in the success of Frito-Lay, helping it to become PepsiCo's most profitable division. The new chairman realized that his flagship Pepsi brand was not likely to win additional market share from Coca-Cola, and focused his efforts on international growth and diversification. Calloway hoped to build on the phenomenal success of the Slice line of fruit juice beverages, which achieved $1 billion in sales and created a new beverage category within just two years of its 1984 introduction. From 1985 to 1993, PepsiCo introduced, acquired, or formed joint ventures to distribute nine beverages, including Lipton Original Iced Teas, Ocean Spray juices, All Sport drink, H2Oh! Sparkling water, Avalon bottled water, and Mug root beer. Many of these products had a 'New Age' light and healthy positioning, in line with consumer tastes, and higher net prices. In 1992, PepsiCo introduced Crystal Pepsi, a clear cola that, while still a traditional soda, also tried to capture the momentum of the 'New Age' beverage trend. In the restaurant segment, PepsiCo's 1986 purchase of Kentucky Fried Chicken (KFC) and 1990 acquisition of the Hot 'n Now hamburger chain continued its emphasis on value-priced fast foods. But the company strayed slightly from that formula with the 1992 and 1993 purchases of such full-service restaurants as California Pizza Kitchen, which specialized in creative wood-fired pizzas, Chevys, a Mexican-style chain, East Side Mario's Italian-style offerings, and D'Angelo Sandwich Shops. Pepsi lost a powerful marketing tool in 1992, when Michael Jackson was accused of child molestation. Although the case was settled out of court, Pepsi dropped its contract with the entertainer. The firm launched its largest promotion ever in May 1992 with the 'Gotta Have It' card, which offered discounts on the products of marketing partners Reebok sporting goods, Continental Airlines, and the MCI telephone long distance company. The company also launched a new marketing (or, as the company phrased it, 'product quality') initiative early in 1994, when it announced that packaged carbonated soft drink products sold in the United States would voluntarily be marked with a 'Best if Consumed By' date. Although Pepsi had commenced international expansion during the 1950s, it had long trailed Coca-Cola's dramatic and overwhelming conquest of international markets. In 1990, CEO Calloway pledged up to $1 billion for overseas development, with the goal of increasing international volume 150 percent by 1995. At that time, Coke held 50 percent of the European soft drink market, while Pepsi claimed a meager ten percent. But Pepsi's advantage was that it could compete in other, less saturated segments. The company's biggest challenge to expanding its restaurant division was affordability. PepsiCo noted that, while it took the average U.S. worker just 15 minutes to earn enough to enjoy a meal in one of the firm's restaurants, it would take an Australian 25 minutes to achieve a similar goal. Pepsi still had other options, however. In 1992, for example, the company formed a joint venture with General Mills called Snack Ventures Europe which emerged as the largest firm in the $17 billion market. By 1993, PepsiCo had invested over $5 billion in international businesses, and its international sales comprised 27 percent, or $6.71 billion, of total annual sales. In January 1992, Calloway was credited by Business Week magazine with emerging
20

from the long shadow cast by his predecessor 'to put together five impressive years of 20 percent compound earnings growth, doubling sales and nearly tripling the company's value on the stock market.' Calloway also worked to reshape PepsiCo's corporate culture by fostering personal responsibility and a decentralized, flexible management style. Calloway, who was battling prostate cancer, retired as CEO in April 1996 and was replaced by Roger A. Enrico, who became chairman as well later in the year (Calloway died in July 1998). Since joining Frito-Lay's marketing department in 1971, Enrico had stints heading up both Pepsi-Cola and Frito-Lay before becoming head of the restaurants division in 1994. He engineered a quick turnaround of the struggling chains by changing the overall strategy, for example adopting more franchising of units rather than company ownership. Under Enrico, the marketing of new concepts was also emphasized, with one notable success being the introduction of stuffed-crust pizza at Pizza Hut. After taking over leadership of PepsiCo, Enrico quickly faced major problems in the overseas beverages operations, including big losses that were posted by its large Latin American bottler and the defection of its Venezuelan partner to Coca-Cola. PepsiCo ended up taking $576 million in special charges related to international writeoffs and restructuring, and its international arm posted a huge operating loss of $846 million, depressing 1996 profits. Among the moves initiated to turn around the international beverage operations, which faced brutal competition from the entrenched and better organized Coca-Cola, was to increase emphasis on emerging markets, such as India, China, Eastern Europe, and Russia, where Coke had a less formidable presence, and to rely less on bottling joint ventures and more on Pepsi- or franchise-owned bottling operations. Another area of concern was the restaurant division, which had consistently been the PepsiCo laggard in terms of performance. Enrico concluded that in order to revitalize the beverage division and to take advantage of the surging FritoLay, which already accounted for 43 percent of PepsiCo's operating profits, the restaurants had to go. Hot 'n Now and the casual dining chains were soon sold off, and in January 1997 PepsiCo announced that it would spin off its three fast-food chains into a separate publicly traded company. The spinoff was completed in October 1997 with the formation of Tricon Global Restaurants, Inc., consisting of the Taco Bell, Pizza Hut, and KFC chains. The exit from restaurants removed one obstacle facing Pepsi in its battle with Coke: that most large fast-food chains had been reluctant to carry Pepsi beverages, not wanting to support the parent of a major competitor. Consequently, Coke held a huge market share advantage over Pepsi in the fast-food channel. Pepsi subsequently made some inroads, for example, in 1999 sealing a tenyear deal with the 11,500-plus-outlet Subway chain. Enrico placed more emphasis, however, on building sales of Pepsi in its core supermarket channel. In this regard, he launched an initiative called 'Power of One' that aimed to take advantage of the synergies between Frito-Lay's salty snacks and the beverages of Pepsi-Cola. This strategy involved persuading grocery retailers to move soft drinks next to snacks, the pitch being that such a placement would increase supermarket sales. In the process, PepsiCo would gain sales of both snacks and beverages while Coca-Cola could only benefit in the latter area. Power of One harkened back to the original rationale for the
21

merger of Pepsi-Cola and Frito-Lay. At the time, the head of Pepsi, Kendall, had told Frito-Lay's leader, Herman W. Lay: 'You make them thirsty, and I'll give them something to drink.' The promise of this seemingly ideal marriage had never really been achieved, however, until the Power of One campaign, which in 1999 helped increase Frito-Lay's market share by two percentage points and boosted Pepsi's volume by 0.6 percent. In the meantime, Enrico was active on a number of other fronts. The company in 1997 nationally launched the Aquafina bottled water brand, which quickly gained the number one position in a fast-growing sector. In a move into the non-salty snack category, Frito-Lay acquired the venerable Cracker Jack brand that year, and subsequently bolstered the brand through renewed advertising, a new four-ounce-bag package, the addition of more peanuts, the inclusion of better prizes, and the strength of Frito-Lay's vast distribution network. In August 1998 PepsiCo opened up another front in its ongoing war with Coca-Cola by acquiring juice-maker Tropicana Products, Inc. from the Seagram Company, Ltd. for $3.3 billion in cash-the largest acquisition in PepsiCo history. Coca-Cola had been the owner of Tropicana's arch-rival, Minute Maid, since 1960, but Tropicana was the clear world juice leader, led by the flagship Tropicana Pure Premium brand. Tropicana had a dominating 41 percent share of the fast-growing chilled orange juice market in the United States. The brand was also attractive for its growth potential; not only were sales of juice growing at a much faster rate than the stagnating carbonated beverage sector, there was also great potential for brand growth overseas. Psychologically, the acquisition also provided PepsiCo with something it very much needed: it could boast of holding at least dominant position over Coca-Cola. In 1999 PepsiCo divested itself of another low-margin, capital-intensive business when it spun off Pepsi Bottling Group, the largest Pepsi bottler in the world, to the public in a $2.3 billion IPO. PepsiCo retained a 35 percent stake. PepsiCo was now focused exclusively on the less capital-intensive businesses of beverages and snack foods. On the beverage side, Enrico, who had gained a reputation as a master marketer, spearheaded a bolder advertising strategy for the flagship Pepsi brand. In 1999, Pepsi-Cola was the exclusive global beverage partner for the movie blockbuster Star Wars, Episode 1: The Phantom Menace. The company also revived the old 'Pepsi Challenge' campaign of the 1970s with the new Pepsi One diet drink facing off against Diet Coke. Pepsi's 'Joy of Cola' advertising campaign was gaining accolades and in 2000 captured renewed attention following the signing of a string of celebrities to endorsement deals, including singer Faith Hill and baseball stars Sammy Sosa and Ken Griffey, Jr. Pepsi also greatly increased the number of vending machines it had planted around the United States, making a renewed push to gain on Coke in another area where the arch-enemy had long dominated. By the end of 1999, after three and one-half years at the helm, Enrico had clearly turned PepsiCo into a stronger, much more focused, and better performing firm. Although revenues were more than one-third lower due to the divestments, earnings were higher by more than $100 million. Operating margins had increased from ten percent to 15 percent, while return on invested capital grew from 15 percent to 20 percent. Net debt had been slashed from $8 billion to $2 billion. During 1999, Steve Reinemund was named president and COO of PepsiCo.
22

Reinemund had headed up Pizza Hut from 1986 to 1992 then was placed in charge of Frito-Lay. In the latter position, he oversaw a division whose sales increased ten percent per year on average and whose profits doubled. During his tenure, Frito-Lay's share of the U.S. salty snack sector jumped from 40 to 60 percent. In October 2000 Enrico announced that he intended to vacate his position as CEO by the end of 2001 and his position as chairman by year end 2002. Reinemund was named the heir apparent. Also that month, PepsiCo reached an agreement to acquire a majority stake in South Beach Beverage Company, maker of the SoBe brand. Popular with young consumers, the SoBe drink line featured herbal ingredients and was the fastest growing brand in the burgeoning noncarbonated alternative beverage sector. An even more tempting target soon attracted PepsiCo's attention: the powerhouse Gatorade brand owned by the Quaker Oats Company. Gatorade held an astounding 83.6 percent of the U.S. retail market for sports drinks and was the world leader in that segment with annual sales of about $2 billion. PepsiCo entered into talks with Quaker about acquiring the company for about $14 billion in stock, but by early November the two sides had failed to reach an agreement. Coca-Cola and Groupe Danone quickly came forward to discuss acquiring Quaker. Coke came exceedingly close to signing a $15.75 billion takeover agreement, but the company's board pulled the plug on the deal at the last minute. Danone soon bowed out as well. At that point, PepsiCo reentered the picture, and in early December the firm announced that it agreed to acquire Quaker Oats for $13.4 billion in stock. This appeared to be quite a coup for PepsiCo as it would not only bring on board the valuable Gatorade brand and make PepsiCo the clear leader in the fast-growing noncarbonated beverage category, it would also add Quaker's small but growing snack business, which included granola and other bars as well as rice cakes. Quaker's non-snack food brands--which included the flagship Quaker oatmeal, Life and Cap'n Crunch cereals, Rice a Roni, and Aunt Jemima syrup--did not fit as neatly into the PepsiCo portfolio but were highly profitable and could eventually be divested if desired. In conjunction with the acquisition announcement, Enrico said that upon completion of the merger, he and the head of Quaker, Robert S. Morrison, would become vice-chairmen of PepsiCo, Morrison would also remain chairman, president, and CEO of Quaker, and Reinemund would become chairman and CEO of PepsiCo, thereby accelerating the management transition. At that same time, PepsiCo's CFO, Indra Nooyi, who was the highest ranking Indian-born woman in corporate America, would become president and CFO. It seemed likely that this new management team would take PepsiCo to new heights in the early 21st century and that the company would continue to be a more and more formidable challenger to arch-rival Coca-Cola.

23

EARLY GROWTH In 1893 Caleb Bradham, a young pharmacist from New Bern, North Carolina, begins experimenting with many different soft drink concoctions. Like many pharmacists at the turn of the century he had a soda fountain in his drugstore, where he served his customers as a cure for Dyspepsia (indigestion) drinks, that he created himself. His most popular beverage was something he called "Brad's drink" made of carbonated water, sugar, vanilla, rare oils, pepsin and cola nuts. In 1893 One of Caleb's formulations, known as "Brad's drink", created and was later renamed Pepsi Cola after the pepsin and cola nuts used in the recipe. In 1898 Caleb Bradham wisely bought the trade name "Pep Cola" for $100 from a competitor from Newark, New Jersey that had gone broke. In 1902 The instant popularity of this new drink leads Bradham to devote all of his energy to developing Pepsi-Cola into a full-fledged business. He applies for a trademark with the U.S. Patent Office, Washington D.C., and forms the first Pepsi-Cola Company. The first Pepsi-Cola newspaper advertisements appeared in the New Bern Weekly Journal. Pepsi's theme line is "Exhilarating, Invigorating, Aids Digestion." On June 16 th 1903 The new name was trademarked. Bradham's neighbor, an artist designed the first Pepsi logo. In 1904 Bradham purchases a building in New Bern known as the "Bishop Factory" for $5,000 and moves all bottling and syrup operations to this location. Pepsi is sold in six-ounce bottles. Sales increase to 19,848 gallons. In 1905 Pepsi-Cola's first bottling franchises are established in Charlotte and Durham, North Carolina. Pepsi receives its new logo, its first change since 1898. In 1906 Pepsi gets another logo change, the third in eight years. The modified script logo is created with the slogan, "The Original Pure Food Drink." There are 15 U.S. Pepsi bottling plants. The Pepsi trademark is registered in Canada. Syrup sales rise to
24

38,605 gallons. The federal government passes the Pure Food and Drug Act, banning substances such as arsenic, lead, barium, and uranium, from food and beverages. This forced many soft drink manufacturers, including Coca-Cola, to change their formulas. Pepsi-Cola, being free of any such impurities, claimed they already met federal requirements. In 1907 Pepsi-Cola Company continues to expand. The company's bottling network grows to 40 franchises. Pepsi-Cola sells more than 100,000 gallons of syrup. Pepsi trademark is registered in Mexico. In 1923 After seventeen years of success, Caleb Bradham lost Pepsi Cola. Pepsi Cola went bankrupt in 1923 and its assets were sold to a North Carolina concern; Craven Holding Corporation for $30,000. Roy C. Megargel, a Wall Street broker, buys the Pepsi trademark, business and goodwill from Craven Holding Corporation for $35,000, forming the Pepsi-Cola Corporation. In 1928 After five continuous losing years, Megargel reorganizes his company as the National Pepsi-Cola Company, becoming the fourth parent company to own the Pepsi trademark. In 1931 Pepsi Cola was bought by the Loft Candy Company. Loft president, Charles G. Guth who reformulated the popular soft drink. Charles G Guth, president of the Loft Company struggled to make a success of Pepsi. In 1934 The drink was a hit and to attract even more sales, the company begins selling its 12ounce drink for five cents (the same cost as six ounces of competitive colas). The 12ounce bottle debuts in Baltimore, where it is an instant success. The Cost savings proves irresistible to Depression- worn Americans and sales skyrocket nationally. In 1940 The Pepsi Cola Company made history when the first advertising jingle was broadcast nationally on the radio. The jingle was "Nickel Nickel" and advertisement for Pepsi Cola that referred to price of Pepsi & the quantity. "Nickel Nickel" became hit record and was recorded into 55 languages. In 1961

25

Pepsi further refines its target audience, recognizing the increasing importance of the younger, post-war generation with the theme "Now it's Pepsi, for those who think young." The new theme defines youth as a state of mind as much as a chronological age, maintaining the brand's appeal to all market segments. Pepsi receives its new logo, the sixth in Pepsi history. The 'serrated' bottle cap logo debuts, accompanying the brand's groundbreaking "Pepsi Generation" ad campaign. Pepsi-Cola continues to lead the soft drink industry in packaging innovations, when the 12-ounce bottle gives way to the 16-ounce size. Twelve-ounce Pepsi cans are first introduced to the military to transport soft drinks all over the world. In 1964 Diet Pepsi was introduced as America's first national diet soft drink. Pepsi-Cola acquires Mountain Dew from the Tip Corporation. In 1965 Expansion outside the soft drink industry begins. Frito-Lay of Dallas, Texas, and Pepsi-Cola merge, forming PepsiCo, Inc. Pepsi is the first company responds to consumer preference with the lightweight, recyclable, plastic bottles. In 1976 Pepsi becomes the single largest soft drink brand sold in American supermarkets. The campaign is "Have a Pepsi Day!" and a classic commercial, "Puppies," becomes one of America's best-loved ads. As people get back to basics, Pepsi is there as one of the simple things in life. The company experiments with new flavors. Twelve-pack cans were introduced. In 1984 Pepsi advertising takes a dramatic turn as Pepsi becomes "the choice of a New Generation." Lemon Lime Slice, the first major.Soft drink with real fruit juice, is introduced, creating a new soft drink category, "juice added." In subsequent line of extension, Mandarin Orange Slice goes on to become the number one orange soft drink in the U.S. Diet Pepsi is reformulated with NutraSweet (aspartame) brand sweetener. In 1989 Pepsi lunges into the next decade by declaring Pepsi lovers "A Generation Ahead." Pepsi-Cola introduces an exciting new flavor, Wild Cherry Pepsi.

26

In 1991 Pepsi introduces the first beverage bottles containing recycled polyethylene terephthalate (or PET) into the marketplace. The development marks the first time recycled plastic is used in direct contact with food in packaging. In 1993 Brand Pepsi introduces its slogan, "Be Young. Have Fun. Drink Pepsi." Pepsi-Cola profits surpass $1 billion. Pepsi introduces an innovative 24-can multi-pack that satisfies growing consumer demand for convenient large-size soft drink packaging. "The Cube" is easier to carry than the traditional 24-pack and it fits in the refrigerator. In 1994 New advertising introducing Diet Pepsi's freshness dating initiative features Pepsi CEO Craig Weatherup explaining the relationship between freshness and superior taste to consumers. Pepsi Foods International and Pepsi-Cola International merge, creating the PepsiCo Foods and Beverages Company. In 1995 The company declares "Nothing else is a Pepsi" and takes top honors in the year's national advertising championship. However, Pepsi made history by launching one of the most ambitious entertainment sites on the World Wide Web. Pepsi World eventually surpasses all expectations, and becomes one of the most landed, and copied, sites in this new media, firmly establishing Pepsi's presence on the Internet. In 1997 Pepsi brought Mirinda Orange in opposite to Fanta. In 1998 Pepsi brought Lemon Mirinda to give competition to Limca. In 1999 Pepsi launched Diet Pepsi and 1.5 liter pet bottle for health conscious people. In 2000 Although Pepsi is a great place to work, Steven Truitt (aka Struitt) takes his skills and hard work elsewhere (for more money of course!), therefore putting an end to his Pepsi page. In 2001 Pepsi launched Aquafina

27

In 2003 Pepsi launched Mountain Dew and Pepsi-Cola launched Pepsi Blue to get the favor of world cup season. In 2004 Pepsi launches two biggest new campaigns: "Dare for more" with appearance of Beyonce, Britney, Pink and Enrique Iglesias, and "Footbattle" featuring great football talent: David Beckham, Roberto Carlos, Francesco Totti, Ronaldinho, Raul, Quaresma, Diego Cunha, Fernando Torres and Van de Vaart. In 2005 Pepsi launched Mirinda Lemon Ginger & 7 UP - Ice. Pepsi-Cola launched Mirinda in Straw Berry flavor to get the favor of movie Batman. In 2006 Indra Nooyi happens to be the fifth chief executive in the group's 41-year history. Everybody is unanimous of her ability to lead. In 2008 The history of Pepsi in Iraq stretches back to 1950 when the brand was launched. It became a popular drink until a socialist economic system was introduced in the 1960s. Non-franchised local brands of Pepsi were in production but might have not tasted the same as the original soft ... In 2009 PepsiCo Chairman and CEO Indra Nooyi have announced that PepsiCo would invest USD 500 million in its India operations over the next three years to triple revenues over the next five years.

28

ORIGIN OF NAME
There are several theories on the origin of the word "pepsi". The only two discussed within the current PepsiCo website are the following:1. Caleb Badham bought the name competitor and changed it to Pepsi-Cola. "Pep Kola" from a local

2. "Pepsi-Cola" is an anagram for "Episcopal" - a large church across the street from Bradham's drugstore. There is a plaque at the site of the original drugstore documenting this, though PepsiCo has denied this theory. The word Pepsi comes from the Greek word "pepsi" ( ), which is a medical term, describing the food dissolving process within one's stomach. It is also a medical term that describes a problem with one's stomach to dissolve foods properly. Another theory is that Caleb Badham and his customers simply thought the name sounded well or the fact that the drink had some kind of "pep" in it because it was a carbonated drink; they gave it the name "Pepsi". As Pepsi was initially intended to cure stomach pains, many believe Bradham coined the name Pepsi from either the condition dyspepsia (stomach ache or indigestion) or the possible one-time use of pepsin root as an ingredient (often used to treat upset stomachs). It was made of carbonated water, sugar, vanilla, rare oils, and kola nuts. Whether the original recipe included the enzyme pepsin is disputed. In 1903, Bradham moved the bottling of Pepsi-Cola from his drugstore into a rented warehouse. That year, Bradham sold 7,968 gallons of syrup. The next year, Pepsi was sold in six-ounce bottles and sales increased to 19,848 gallons. In 1924, Pepsi received its first logo redesign since the original design of 1905. In 1926, the logo was changed again. In 1929, automobile race pioneer Barney Oldfield endorsed Pepsi-Cola in newspaper ads as "A bully drink...refreshing, invigorating, a fine bracer before a race". RECENT DEVELOPMENTS Recently Indra Nooyi (PepsiCo Chairman and CEO) has announced that PepsiCo would invest USD 500 million in its India operations over the next three years to triple revenues over the next five years. These investments would be spread into manufacturing capacity, market infrastructure, environment sustainability initiatives, R&D, new product development, and agriculture. It was declared by Ms. Nooyi when she was addressing a press conference in Delhi. Ms. Nooyi said that PepsiCo would also be looking at acquiring local brands or companies. Along with Nooyi, the 26 member PepsiCo Executive Committee was on a three day visit to India. In the current year PepsiCos total system investment in its Indian beverage business will now exceed $220 million. Of this, PepsiCo India will invest over $170 million, with its bottling partners investing the balance. This is by far the largest investment made by PepsiCo in its beverage business since its entry into India. Mr. Sanjeev Chadha, Chairman and CEO, PepsiCo, India Region said that
29

PepsiCos beverage business momentum had steadily accelerated over the last nine quarters. they were extremely pleased with their performance in 2008. Our beverage volume was growing around 30 per cent in that year. He added To sustain this growth, I am happy to report that we have decided to revise our earlier investment plans upwards, and are now more than doubling our investments over last year. PepsiCo is now the fastest growing beverage business in India. These new investments will be spread across manufacturing capacity, market infrastructure, supply chain, fruit processing, agriculture, and R&D. This is over and above the significant capacity additions made by PepsiCo last year. Over the next three years, capacities will be augmented in other locations, including the setting up of new Greenfield plants. The company has already begun scouting around for suitable locations, and will focus on states that offer the best investment environment. PepsiCos strong growth has been spread across the companys diverse portfolio, with all categories: carbonated drinks, juices, juice-based drinks, sports drinks, as well as water showing strong momentum. The growth has been driven by investments in market infrastructure, innovative marketing campaigns, a stronger distribution network, the launch of new products like the extremely popular Nimbooz, and new packages like the stylish Pepsi My Can. The excise reduction by the Indian government as part of its fiscal stimulus package, has played a critical role in enabling the company to withstand cost pressures and maintain price stability of its products. PepsiCo wants its new investments to be in place to capture the higher growth potential that it expects India will offer. Besides the new investment which is expected to contribute 50,000 new direct and indirect jobs to the Indian economy, PepsiCo has also announced a pilot program in India which directly delivers against the United Nations Millennium Development Goal to eradicate extreme poverty and hunger by 2015. Addressing the same press conference, Dr. Mehmood Khan, Chief Scientific Officer, PepsiCo, said, Millions of people here in India and elsewhere suffer major deficiencies of key micronutrients, like iron, Vitamin A and zinc, which lead to serious health problems. We recognize that almost 50 percent of young women are iron deficient in India placing them and their children at risk for physical and mental impairments. PepsiCo is working toward developing nutritious fortified products to reduce micronutrient deficiencies in select developing countries, to address the huge challenge of malnutrition among the poor, leveraging our core competencies including R&D, product development, marketing, sales and distribution. The initial work would focus on reaching young women with a nutritious product. Regarding the water balance, PepsiCo Vice Chairman, Mike White reaffirmed that its India operations were on track to achieve a positive water balance by 2009. This means that PepsiCo India will save and recharge more water than it will use in its beverage plants throughout the year.

30

SOFT DRINKS INDUSTRIES IN INDIA India is one of the top five markets in terms of growth of the soft drinks market. The per capita consumption of soft drinks in the country was very low compared to in US (600+ bottles per annum). But being one of the fastest growing markets and by the sheer volumes, India is a promising market for soft drinks. The major players in soft drinks market in India are PepsiCo and Coca-Cola Co. like elsewhere in the world. Coca-Cola acquired a number of local brands like Limca, Gold Spot and Thumps Up when it entered Indian market second time. Pepsi Cos soft drink portfolio consists of Miranda, Mountain Dew, Nimbooz, Slice and 7Up along with Pepsi. The market share of each of the company is more or less the same, though there is a conflict in the estimates quoted by different sources After a somewhat subdued performance in 2006 due to a recurrence of the pesticides controversy, soft drinks sales bounced back strongly to record double-digit volume growth in 2009. With carbonates growth back on a positive upward curve alongside burgeoning sales of fruit/vegetable juice and bottles water, soft drinks showed impressive growth in 2009. Off-trade volumes grew slightly faster than on-trade volumes, driven by higher consumption of packaged and branded soft drinks at home and on the go. The emergence of supermarkets/hypermarkets, heavy consumer promotions and various new product launches played a key role in driving off-trade volume growth. With consumers showing a growing preference for healthier soft drinks such as bottled water and fruit/vegetable juice rather than carbonates in 2009, the two carbonates giants suffered a marginal decline in share. Although both players embarked on a change in strategy to focus more on non-carbonated soft drinks in their portfolios, they were unable to maintain share and lost out slightly to home-grown players Parle Bisleri and Dabur India. Coca-Cola India launched Minute Maid and pushed the sales of its juices while PepsiCo India heavily promoted Tropicana, Aquafina and Gatorade during 2008. In addition, Coca-Cola India and PepsiCo India embarked on re-branding themselves as total beverage players and not just carbonates players. With the retail scene in India undergoing a rapid metamorphosis with the establishment of supermarkets/ hypermarkets and convenience stores, soft drinks sales have benefited positively. People in urban areas are increasingly flocking to supermarkets to pick up specialty items that are not available in the kirana stores that are found all over India. Modern retail outlets have provided soft drinks players with many opportunities to push their brands. Consumer promotions for fruit/vegetable juice and emerging sectors such as RTD tea and functional drinks are driving product sampling. Attractive point-of-sale (PoS) displays and gift packs of concentrates are also drawing consumer attention in supermarkets/hypermarkets. The major ingredient in a soft drink is water. It constitutes close to 90% of the soft drink content. Added to this, the drink also contains sweeteners, Carbon dioxide, Citric Acid/Malice acid, Colors, Preservatives, Anti Oxidants and other emulsifying agents, etc In India, the soft drinks industry came into existence in the late 50s and early 60s.Since then, many brands have come up over the years. Similarly, many brands have wilted under the intense competition

31

(as if to balance the situation) and high cost of advertising. This has led to the idea that sales depend on advertising to a large extent. In the late 80s and early 90s the industry had grown rapidly with the active support from the government. The major thrust from the government came in the form of the new industrial policy of 1991, which propounded the concept of liberalization and promoted foreign investments. By definition this intensifies the competition and ultimately benefits the consumers in terms of quality products and wider choice. Over the years, the industry has grown at a very fast rate. The growth was beyond the expectations of many. It was expected that the international players would leave no stone unturned to capture the huge potential of the Indian market. After the exit of Coca-Cola and Fanta in 1977, various brands appeared on the Indian scene, courtesy Indian entrepreneurs, which fizzled out over a period. Only a few managed to endure over the passage of time. Indian soft drinks major, Parle products Ltd was considered as the undisputed market leader but it was caught napping by the entry of the international major PepsiCo. Still, both of them managed to carve out portions of the market between them, with PepsiCo getting the Lions share. So they went along for few years. But where Pepsi goes, Coca-Cola cannot be far behind. Coca-Cola stormed into India to pick up where it left off in 77.With the re-entry of Coca-Cola in the Indian market after a gap of 16 years in 1993 on October 23, the situation drastically, to put mildly, and it has been a story of one-upmanship ever since for control of the market. Though the industry is now growing at a faster rate, the growth is confirmed to the metros and mini metros. About two third of the market share can be accounted to the metros themselves. (39) These figures led experts to believe that it is the urban population in general which is fond of soft drinks at any given time or occasion. On the other hand, the consumption in the rural areas is sporadic, to use a term. This may be attributed to the fact that most of the rural India still considers as a luxury. A clear example of this is that the consumption of soft drink in rural areas is mostly in marriage parties or in other ceremonies, where it is considered as a mild status symbol. Be one of reasons why the per capita consumption of the soft drinks is quite as compared to other countries. Whatever may be the reason for it, the mere size of the Indian middle class? Generally referred to as GIMC (the great Indian middle class), and is estimated to be around 200 million, which is larger than any single market in the world. This along with the positive trend towards westernization and social change presents an extremely lucrative market for any investor around the globe, especially in the fast moving consumer goods (FMCG) segment.

32

Our Vision and Mission:

At PepsiCo, we believe being a responsible corporate citizen is not only the right thing to do, but the right thing to do for our Business. Our Vision:"PepsiCo's responsibility is to continually improve all aspects of the world in which we operate environment, social, economic creating a better tomorrow than today."Our vision is put into action through programs and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company. Our Mission:Our mission is to be the world's premier consumer products company focused on convenient foods and beverages. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity. Performance with Purpose:-At PepsiCo, we're committed to achieving business and financial success while leaving a positive imprint on society delivering what we call Performance with Purpose.Our approach to superior financial performance is straightforward drive shareholder value. By addressing social and environmental issues, we also deliver on our purose agenda, which consists of human, environmental, and talent sustainability.

33

PEPSICO SLOGAN IN 2010 -You Got The Right One Baby, Uh-Huh.

Pepsi works on SMART formula: SPECIFIC- Helps the sales force understand exactly what is expected out of them. MEASUREABLE- ensure that management can track individuals & team performance. ACHIEVABLE- increase the level of challenges & motivation within the sales force. RELEVANTexecution. translates the companys initiatives into market place

TIME BOUND- avoids dragging and ensure meeting deadlines.

34

Slogans and Logos

One of the main reasons for the popularity of Pepsi is the use of slogans which they use to attract customers. Different slogans have been used to attract different people of different ages. They use different slogans in different countries around the world. Following are some of the slogans used by Pepsi for several years: 1898 Brad's Drink Exhilarating,Invigorating,Aids Digestion

1903

1906 Original Pure Food Drink 1908 Delicious and Healthful 1915 For All Thirsts - Pepsi: Cola 1919 Pepsi: Cola - It makes you Scintillate 1920 Drink Pepsi: Cola - It Will Satisfy You 1928 Peps You Up! 1929 Here's Health! 1932 Sparkling, Delicious 1933 It's the Best Cola Drink 1934 Double Size Refreshing and Healthful 1938 Join the Swing to Pepsi 1939 Twice as Much for a Nickel 1943 Bigger Drink, Better Taste 1947 It's a Great American Custom

35

1949 Why Take Less When Pepsi's Best? 1950 More Bounce to the Ounce 1954 The Light Refreshment Refreshing Without Filling

1958 Be Sociable, Have a Pepsi 1961 Now It's Pepsi for Those Who Think Young Come Alive! Generation You're in the Pepsi

1963

1967

Taste that Beats the Others Cold, Pepsi Pours It On. You've Got a Lot to Live, Pepsi's Got a Lot to Give

1969

1973 Join the Pepsi People Feeling' Free 1976 Have a Pepsi Day! 1979 Catch That Pepsi Spirit Take the Pepsi Challenge

1981 Pepsi's Got Your Taste for Life 1983 Pepsi Now! 1984 The Choice of a New Generation 1987 America's Choice 1989 A Generation Ahead 1992 Gotta Have It 1993 Be Young, Have Fun, Drink Pepsi 1995 Nothing Else is a Pepsi

36

1997 Generati n Next 1998 Same Great Taste 1999 The Joy of Cola 2000 The Joy of Pepsi 2003 Pepsi It s the Cola 2006 Taste the one that s forever young 2007 Taste the once that s forever young 2008 Something for Everyone 2009 Yeh hai youngistaan meri jaan Every Pepsi refreshes the worl 2010

37

ACHIEVEMENTS OF PEPSICO
y

PepsiCo is mentioned among 26 companies that earned Governance Metrics internationals (GMI) highest governance rating.

National Minority Supplier Development Council (NMSDC) names PepsiCo one of the Corporations of the Year.

Minority Business News names PepsiCo Chairman and CEO Steve Refinement Executive of the Year.

Pepsi Musica Website Wins Best Interactive Marketing Digital Community Award from the Latino Marketing Awards.

Diversity Inc magazine recognizes the PepsiCo Internet site as a "Superstar" web site for "excellence in using the Internet in their efforts to promote their dedication to diversity."

Latin Trade Reader Survey Names PepsiCo #7 in list of Latin Americas Most-Respected Companies.

PepsiCo is chosen for the 2005 list of the NAFE Top 30 Companies for Executive Women.

PepsiCo publishes first Corporate Citizenship report in its 2003 Annual Report.

Pepsi-Cola signs an exclusive four-year sponsorship deal with the Canadian Hockey Association, making Pepsi the official soft drink.

Pepsi announces four-year sponsorship agreement with the UK Football Association.

y y

PepsiCola trademark turns 100 years old. Pepsi Vanilla is launched in the United States.

38

Tropicana introduces Tropicana 100% Juice Blends. Pepsi unveils a new tagline: "Pepsi. It's the Cola." It is the brand's first major campaign shift since 1999 and highlights how Pepsi goes with everything from food to fun.

Aquafina debuts new line of great-tasting enhanced waters. Aquafina Essentials target active, health-conscious adults in four lightly sweetened varieties including B-Power, Calcium+, Daily C and Multi-V in 20-oz.bottles.

PepsiCo reorganizes to unite all North American beverage operations, including Pepsi-Cola Tropicana and Gatorade, into one new division PepsiCo Beverages and Foods North America.

y y

PepsiCo announces $5 billion share repurchase program. PepsiCo introduces Marathon Kids, a program that encourages kids and their families to be more physically active. The program debuts in Dallas.

Pepsi-Cola Company launches Dole single-serve juices in vending machines, coolers and other retail outlets throughout the United States.

Pepsi-Cola's flagship brand will have new tagline, "The Joy of Pepsi." Tropicana celebrates a company milestone - 300 billion fresh an orange squeezed since the company began making countrys first ever mass

distributed, not-from-concentrate juice in 1947.

y

The Board of Directors of PepsiCo, Inc. elected Steven S Reinemund chairman of the board and chief executive officer, succeeding Roger Enrico who will become vice chairman. The board also elected Indra K. Nooyi as a director and gave her the additional title of president of PepsiCo in addition to CFO.

Frito-Lay introduces Lay's Bistro Gourmet potato chips.

39

Pepsi-Cola Company introduces a "Pepsi Twist." Regular and diet versions of the crisp new cola with lemon are entering retail outlets in selected U.S. markets.

y y y y

SLAM, the orange brand Mirinda, is launched in Italy. PepsiCo acquires Tasali Foods, Saudi Arabia's leading snack company. Pepsi-Cola teams up with Yahoo Inc., the biggest web navigation. Aquafina brand bottled water becomes the best-selling brand of single-serve bottled water in US retail channels.

PepsiStuff.com, a web site for merchandise, discounts and digital music files from biggest names in movies, music, video games, apparel and sports is launched in joint promotion with Yahoo.

y y y

Pepsi-Cola launches "Sierra Mist" a caffeine-free, lemon/lime soda. PepsiCo, Inc. and The Quaker Oats Company reached an agreement to merge. PepsiCo completes the acquisition of a majority stake in South Beach Beverage Co.

PepsiCo sales are $20 billion and the company has 125,000 employees at year end.

y y y

Steve Reinemund named president of PepsiCo. Lipton introduces Iced Tea Green Tea with Honey and Diet Peach. Tropicana juices are entering the huge India market for the first time. Spearheaded by Tropicana Asia Pacific, orange juice will appear in the New Delhi and Bangalore markets.

Pepsi-Cola introduces two-liter plastic bottle with built-in "grip handle" that makes it easier to grip and pour.

40

PepsiCo Chairman and CEO Roger A. Enrico donate his salary to provide scholarships for children of PepsiCo employees.

Pepsi-Cola announces breakthrough product: Pepsi One, great-tasting, Onecalorie cola is first in United States with newly FDA approved sweetener Sunett.

PepsiCo acquires Tropicana Products from Seagram Company Ltd., the biggest acquisition ever undertaken by PepsiCo. Tropicana was founded in 1947 by Anthony Rossi. Its major brand is Tropicana Pure Premium Juices. In November the PepsiCo Board of Directors authorizes the company to convert a significant portion of its $7 billion company-owned bottling operations, The Pepsi Bottling Group (PBG) into public ownership.

Pepsi-Cola North American bottling operations become a separate unit called The Pepsi-Cola Bottling Co.

Pepsi-Cola celebrates 100th Anniversary with first worldwide bottlers conference, held in Hawaii. The event is held during the same time as first bottler's conference.

y y

Pepsi-Cola launches Pepsi World on the web. Pepsi-Cola domestic and international operations combined into Pepsi-Cola Company. International and domestic snack food operations combined into one business unit called Frito-Lay Company.

Pepsi-Cola and MTV establish a partnership to develop international programming, cross promotions, marketing tie-ins and special events.

Filming of the world's first commercial in space. Cosmonauts shoot a large blue Pepsi can in orbit outside the MIR Space station.

Pepsi-Cola introduces "Nothing else is a Pepsi" theme line.

41

y y

7Up International launches 7UP Ice Cola, a new clear cola. Frito-Lay aggressively expands its low/no-fat snack segment. Baked Lays is introduced.

PepsiCo will introduce Lay's brand potato chips in 20 markets throughout the world.

Pepsi-Cola is first major soft drink maker to begin producing and distributing its product in Vietnam.

Pepsi-Cola International acquires Indian company, its first big bottling plant in Bombay.

Pepsi-Cola licenses the Citrus Hill trademark from The Procter & Gamble Co. to launch a line of fountain juices and drinks.

China gets cheese-less Cheeotos, the first time a major snack-food brand will be produced in China for Chinese tastes.

PepsiCo sales

reach

$30.4

billion.

There

are 470,000

employees

worldwide, making PepsiCo the third largest employer.

y

After a 27-year absence, Pepsi returns to Broadway with the lighting of a spectacular new neon sign in Times Square.

Both PepsiCo beverages and snack food operating profits pass the $1 billion mark.

y y

Pepsi-Cola introduces freshness dating. Pepsi introduces "The Cube," an innovative 24-can multipack, that satisfies growing consumer demand for convenient large size soft drink packaging.

PepsiCo acquires East Side Mario's Restaurants Inc. It sells the 40 units in 1997.

Pepsi-Cola introduces Aquafina bottled water into test market.

42

PepsiCo purchases an equity interest in California Pizza Kitchen. It is sold in 1997.

PepsiCo purchases an equity position in Carts of Colorado, Inc., the leading manufacturer and marketer of mobile merchandising equipment. It is sold in 1995.

PepsiCo acquires a controlling interest in Gamesa, Mexico's largest cookie company.

PepsiCo signs the largest commercial trade agreement in history with the Soviet Union.

y y

PepsiCo profits exceed $1 billion for the first time. PepsiCo acquires Walkers Crisps and Smith Crisps, two of the United Kingdom's leading snack food companies.

y y

PepsiCo acquires Smart food ready-to-eat popcorn business. PepsiCo enters top 25 of Fortune 500 ranking with sales of $15.4 billion, it is number 23. The company has more than 300,000 employees.

y y

Pepsi-Cola International enters a landmark joint venture agreement in India. Worldwide retails sales of Doritos brand tortilla chips hit $1 billion. It is the world's largest selling snack chips brand.

PepsiCo purchases 7-Up International, the third largest franchise soft drink operation outside the United States.

PepsiCo passes $10 billion in sales. PepsiCo is listed on the Tokyo stock exchange.

PepsiCo Board of Directors visits the People's Republic of China to mark the opening of Pepsi's second bottling plant in China.

43

PepsiCo is now the largest company in the beverage industry. The company has revenues of more than $7.5 billion, more than 137,000 employees.

Pepsi-Cola products are available in nearly 150 countries and territories around the world. Snack food operations are in 10 international markets.

The cola war takes "one giant sip for mankind," when a Pepsi "space can" is successfully tested aboard the space shuttle.

PepsiCo is restructured to focus on its three core businesses: soft drinks, snack foods and restaurants. Transportation and sporting goods businesses are sold.

y y

Wayne Calloway becomes president of PepsiCo. Pepsi Free and Diet Pepsi Free, the first major brand caffeine-free colas, are introduced.

y y y

Inauguration of the first Pepsi-Cola operation in China. PepsiCo passes $7 billion in sales. PepsiCo Fitness Center is completed; making PepsiCo one of the most advanced companies in the area of employee health and fitness.

"Give me a Dew" succeeds the slogan "Reach for the Sun, Reach for a Mountain Dew."

y y y

Opening of PepsiCo Research and Technical Center in Valhalla, N.Y. Pepsi introduces twelve-pack cans. PepsiCo acquires Pizza Hut, Inc. Pizza Hut was founded in 1958 by Dan and Frank Carney. It is spun off along with Taco Bell and KFC businesses as Tricon Global Restaurants, Inc. in 1997.

PepsiCo sales pass the $2 billion mark. Pepsi-Cola becomes the first American consumer product to be produced, marketed and sold in the former Soviet Union.
44

Pepsi is the first company to respond to consumer preference with lightweight, recyclable, plastic bottles.

Bold, modern Pepsi-Cola packaging using red, white and blue is introduced. "You've got a lot to live, Pepsi's got a lot to give," becomes the advertising theme.9

Doritos brand tortilla chips are introduced. They are destined to become the most popular snack chip in the U.S. Pepsi enters Japan and Eastern Europe.

45

MARKET GROWTH OF PEPSI IN LAST 5 YRS

IN YEAR 2004 The National Association for Female Executives (NAFE) names PepsiCo among the NAFE Top 30 Companies for Executive Women. Sam s Club recognizes the PBF Gatorade Sam Club s team as its 2003 Supplier of the Year. The award recognizes excellence in key performance areas, including sales growth in stock percentage, invertory turns as well as accomplishments in brining innovative products and business solutions to market Governance Metrics International gives PepsiCo its highest rating (10). PepsiCo is one of only 22 companies to receive the perfect score. Institutional Shareholder Services (ISS) ranks PepsiCo 96.5 and 100, meaning that on corporate governance matters, PepsiCo outperforms 96.5% of the S&P 500 and 100% of the food, beverage and tobacco industry. Pepsi-Cola Wins Reggie Award for Black History Month Promotion.Pepsi-Cola recently received a Reggie Award, the most prestigious award in the promotion marketing field, for its 2003 Black History Month: /Create Your Own History promotion, Brand week reports. PepsiCo named to Business Week 50, an annual ranking of companies thatsymbolize the best in Corporate America.The Women President s Educational Organization (WPEO) recognizes PepsiCo as Outstanding Corporation from the New York Region. Theselection criteria is based on the contributions made to women business owners and the women s business community PepsiCo is recognized as one of America s Top Corporations for Women s Business Enterprises be WBENC for the second year in a row. Diversity ranks PepsiCo #5 (up from #25) in its 2004 list of Top 50 Companies for Diversity Pepsi also ranked first in the Top 10 Companies for African Americans and the Top 10 Companies for Latinos. In 2007 PepsiCo redesigned their cans for the fourteenth time, and for the first time, included more than thirty different backgrounds on each can, introducing a new background every three weeks. One of their background designs includes a string of repetitive numbers 73774. This is a numerical expression from a telephone keypad of the word "Pepsi." In late 2008 Pepsi overhauled their entire brand, simultaneously introducing a new logo and a minimalist label design. The redesign was comparable to Coca-Cola's earlier simplification of their can and bottle designs. Due to the timing of the new logo release, some have criticized the logo change, as the new logo looked strikingly similar to the logo used for Barak Obama's successful presidential campaign, implicating a bias towards the President. Also in 4th quarter of 2008 Pepsi teamed up with Google/YouTube to produce the first daily entertainment show on YouTube. This daily show deals with pop culture, internet viral videos, and celebrity gossip. Pop tub is refreshed daily from Pepsi.
46

Since 2007

Pepsi, Lay's, and Gatorade have had a "Bring Home the Cup," contest for Canada's biggest hockey fans. Hockey fans were asked to submit content (videos, pictures or essays) for a chance at winning a party in their hometown with The Stanley Cup and Mark Messier. In 2009, "Bring Home the Cup," changed to "Team Up and Bring Home the Cup." The new installment of the campaign asks for team involvement and an advocate to submit content on behalf of their team for the chance to have the Stanley Cup delivered to the team's hometown by Mark Messier Pepsi has official sponsorship deals with three of the four major North American professional sports leagues: the National Football League, National Hockey League and Major League Baseball. Pepsi also sponsors Major League Soccer. Pepsi also has sponsorship deals in international cricket teams. The Pakistan cricket team are just one of the teams that the brand sponsers. The team wears the Pepsi logo on the front of their test and ODI test match clothing. In 2008 year PepsiCo Foundation announces two major new grants to Water Partners and Safe Water Network programs to provide access to safe water and sanitation in developing countries PepsiCo Again Named to the Dow Jones Sustainability Index PepsiCo Agrees to Buy Bulgaria's Leading Nuts and Seeds Company. PepsiCo Announces Initiatives With the Earth Institute and H2O Africa to Drive Sustainable Water Practices Forbes Names PepsiCo Among Its Best Big Companies .PepsiCo India Commissions First Remote Wind Turbine to Generate Renewable, Clean Energy CRO Names PepsiCo to Top 25 100 Best Corporate Citizens 2008. PepsiCo to Buy Russian Juice Leader, Lebedyansky. Employees Lead Effort to Make Chicago Plaza First LEED-Certified PepsiCo Headquarters. Gatorade Launches Gatorade Tiger with Comprehensive Integrated Marketing Campaign PepsiCo Honored with 2008 Energy Star Partner of the Year Award UK Vitamin Water Brand- V Water Acquired by PepsiCo. Quaker Plant in Cedar Rapids Closes and Reopens Facility Due to Flooding to Protect Employees. PepsiCo Foodservice and Naked Juice Expand Starbucks Presence. Gatorade Sports Science Institute Gathers World's Leading Researchers on Protein Nutritio PepsiCo International's China Foods Wins "China's Top Leaders 2008" Award Wall Street Journal Article Recognizes PepsiCo for Leadership in Employment of People with Different Abilities. PepsiCo and Frito-Lay Join SmartWay in Commitment to Reduce GreenhouseGas Emissions .PepsiCo Beats Coke in Race to Launch New Natural Sweetener (Stevia) .PepsiCo France Recognized as "Great Place To Work" by Institute Survey. PepsiCo Commits to Reducing Acryalmide Levels in Potato Chip Products and Restructured Potato Snacks in California.Subway Names PepsiCo"Vendor of the Year" for Sustainability Leadership Tazo Tea Joins Pepsi Lipton Partnership. Pepsi Introduces 3 New Drinks to Help Refresh Product Line Posted by admin on Mar 5th, 2009 and filed under Retail. You can follow any responses to this entry through the RSS 2.0.
47

In 2009 PepsiCo Chairman and CEO Indra Nooyi have announced that PepsiCo would invest USD 500 million in its India operations over the next three years to triple revenues over the next five years .As part of the company s Refresh Everything campaign, Pepsi is introducing three new products. Pepsi Natural, Pepsi Throwback and Mountain Dew Throwback, all sweetened with natural sugar, which will be hitting the beverage aisle this March and April. We re complementing and reinforcing our core soft drink offerings with a hat trick of innovative products, said Frank Cooper, VP of portfolio brands, Pepsi-Cola North America Beverages. Pepsi Natural and the Throwback duo give consumers the opportunity to refresh how they experience soft drinks from a premium, all-natural beverage to a fun, and retro twist on two of our most popular brands. Were continuing to offer a variety of products across different beverage categories, with a splash of nostalgia and entirely new experiences.Pepsi Natural An all-new premium cola, Pepsi Natural is made with all-natural ingredients, including lightly sparkling water, natural sugar, natural caramel and kola nut extract. The amber-hued cola gets its color from natural caramel and natural apple extract. Pepsi Natural is packaged in a 12-oz. glass bottle and will be available in single-serve and 4-packs initially in the premium and/or natural food aisles of retail outlets in the following ten regional markets; Chicago, Cleveland, Pittsburgh, Los Angeles, San Diego, San Francisco, Seattle, Portland, Las Vegas and New York. Pepsi Throwback and Mountain Dew Throwback Pepsi and Mountain Dew are offering consumers a taste of the past with their own versions of Throwback, two new limited time only products inspired by the 60s and 70s, sweetened with natural sugar in a retro-look package. For some, it will be a trip down memory lane, but for those too young to remember, it will be a chance to experience a new twist on the Pepsi brand. Pepsi Throwback and Mountain Dew Throwback will be available nationally for eight weeks only, beginning April 20. Source: Pepsi-Cola North America Beverages What are the Different products of pepsico? PepsiCo makes products like Doritos, Lay's, Cheetos, Fritos, Ruffle potato chips,Tostitos, Quaker Chewy granola bars, Sun Chips, Rold Gold pretzels, Stacy's pita chips, Smartfood popcorn, Pepsi, Mountain Dew, Gatorade, Tropicana Pure premium, Sierra Mist, Propel, Tropicana juice drinks, Dole, SOBE Life Water, Aquafina, Cap'n Crunch, Life cereal, Starbucks ready to drink coffee, Lipton read to drink tea, Quaker oatmeal, Aunt Jemina pancake syrup, and Aunt Jemina pancake mix. The major brand categories owned by Pepsico, Inc. include Pepsi, Frito-Lay, Gatorade, Quaker Oats and Tropicana. Each of these has numerous other product offerings in their respective categories, both U.S. and internationally. For example, the Pepsi-cola family includes over two dozen beverage brands, such as Mountain Dew, Mug (root beer) and several partnerships (e.g., Lipton ice tea). Quaker Oats includes Rice-a-Roni side dishes, Aunt Jemima mixes and syrups, etc.

48

MARKETING STRATEGY
Marketing strategy is the complete and unbeatable plan designed specifically for attaining the marketing objective of the firm. The market objective indicates what the firm indicate, what the firm wants to achieves. The marketing strategy provides for achieving then. The marketing strategy is not able idea. It is a well outlined plan and there are different ways to formulating it. Basically formulating of marketing strategy consists of two main steps. Selecting a target market. Assembling the marketing mix. Actually, the target marketing and marketing mix together constitute the marketing strategy of the firm. When the Pepsi Food Company entered in the Indian soft drink market, the market was already prevailed by coke and previously it was Parle, Pepsi tried to establish in India with a unique marketing policy. Pepsi took into consideration of youth segment target market. Though the advertisement of Pepsi highlighted the style of living of young generation with different walk of life. Pepsi bought in its advertisement different stalwart s personalities from fields like young movie stars, sports star and famous personalities from different fields. It has attracted the young generation and of course increase the sale of Pepsi, Pepsi also organized the national and international sports programmed to attract the young generatio Marketing Strategy is the complete and unbeatable plan designed specifically for attaining the marketing objective of the firm. The market objective indicates what the firm indicates, what the firm wants to achieves, the marketing strategy provides for achieving them. The marketing is not just idea. It is a well outlined plan, and there are different ways to formulating it. Basically formulating of marketing strategy consists of two main steps. Selecting a target market, assembling the marketing mix, actually, the target marketing and marketing mix together constitute the marketing strategy of the firm. When the Pepsi food company entered in the Indian soft drink market, the market was already prevailed by coke and previously it was Parle. Pepsi tried to establish in India with a unique marketing policy. Pepsi took into consideration of youth segment target market. Though the advertisement of Pepsi highlighted the style of living of young generation with different walk of life, Pepsi brought in its advertisement different stalwart s personalities from fields like young cine stars, sport stars and famous personalities from different fields. It has attracted the young generation and of course increase the sale of Pepsi, also organized many national and international sports events to attract the young generation. In1940s advertisement specifically targeting African AmericansWalter Mack was named the new President of Pepsi-Cola and guided the company through the 1940s. Mack, who supported progressive causes, noticed that the company's strategy of using advertising for a general audience either ignored African Americans or used ethnic stereotypes in portraying blacks. He
49

realized African Americans were an untapped niche market and that Pepsi stood to gain market share by targeting its advertising directly towards them. this end, he hired Hennan Smith, an advertising executive "from the Negro newspaper field" to lead an all-black sales team, which had to be cut due to the onset of World War II. In 1947, Mack resumed his efforts, hiring Edward F. Boyd to lead a twelve-man team. They came up with advertising portraying black Americans in a positive light, such as one with a smiling mother holding a six pack of Pepsi while her son (a young Ron Brown, who grew up to be Secretary of Commerce) reaches up for one. Another ad campaign, titled "Leaders in Their Fields", profiled twenty prominent African Americans such as Nobel Peace Prize winner Ralph Bunche and photographer Gordon Parks. Boyd also led a sales team composed entirely of blacks around the country to promote Pepsi. Racial segregation and Jim Crow laws were still in place throughout much of the U.S., so Boyd's team faced a great deal of discrimination as a result, from insults by Pepsi co-workers to threats by the Ku Klux Klan. On the other hand, they were able to use racism as a selling point, attacking Coke's reluctance to hire blacks and support by the chairman of Coke for segregationist Governor of Georgia Herman Talmadge. As a result, Pepsi's market share as compared to Coke's shot up dramatically. After the sales team visited Chicago, Pepsi's share in the city overtook that of Coke for the first time. This focus on the market for black people caused some consternation within the company and among its affiliates. They did not want to seem focused on black customers for fear white customers would be pushed away In a meeting at the Waldorf-Astoria Hotel, Mack tried to assuage the 500 bottlers in attendance by pandering to them, saying, "We don't want it to become known as a nigger drink." After Mack left the company in 1950, support for the black sales team faded and it was cut.Pepsi logo (1973-87). In 1987, the font was modified slightly to a more rounded version which was used until 1991. Pepsi logo (2003-08). As of July 2009, this logo is still used with Pepsi one and Pepsi wild cherry. In 1975, Pepsi introduced the Pepsi Challenge marketing campaign where PepsiCo set up a blind tasting between Pepsi-Cola and rival Coca-Cola. During these blind taste tests the majority of participants picked Pepsi as the better tasting of the two soft drinks. PepsiCo took great advantage of the campaign with television commercials reporting the results to the public. In 1976 Pepsi, RKO Bottlers in Toledo, Ohio hired the first female Pepsi salesperson, Denise Muck, to coincide with the United States bicentennial celebration. In 1996, PepsiCo launched the highly successful Pepsi Stuff marketing strategy. By 2002, the strategy was cited by Promo Magazine as one of 16 "Ageless Wonders" that "helped redefine promotion marketing." In 2007, PepsiCo redesigned their cans for the fourteenth time, and for the first time, included more than thirty different backgrounds on each can, introducing a new background every three weeks. One of their background designs includes a string of repetitive numbers 73774. This is a numerical expression from a telephone keypad of the word "Pepsi." In late 2008, Pepsi overhauled their entire brand, simultaneously introducing a new logo and a minimalist label design. The redesign was comparable to Coca-Cola's earlier simplification of their can and bottle designs. Also in 4th quarter of 2008 Pepsi teamed up with Google/YouTube to produce the first daily entertainment show on
50

YouTube. This daily show deals with pop culture, internet viral videos, and celebrity gossip. Pop tub is refreshed daily from Pepsi. Since 2007, Pepsi, Lay's, and Gatorade have had a "Bring Home the Cup," contest for Canada's biggest hockey fans. Hockey fans were asked to submit content (videos, pictures or essays) for a chance at winning a party in their hometown with The Stanley Cup and Mark Messier. In 2009, "Bring Home the Cup," changed to "Team Up and Bring Home the Cup." The new installment of the campaign asks for team involvement and an advocate to submit content on behalf of their team for the chance to have the Stanley Cup delivered to the team's hometown by Mark Messier. Pepsi has official sponsorship deals with three of the four major North American professional sports leagues: the National Football League, National Hockey League and Major League Baseball. Pepsi also sponsors Major League Soccer. Pepsi also has sponsorship deals in international cricket teams. The Pakistan cricket team is just one of the teams that the brand sponsors. The team wears the Pepsi logo on the front of their test and ODI test match clothing. On July 6, 2009, Pepsi announced it would make a $1 billion investment in Russia over three years, bringing the total Pepsi investment in the country to $4 billion. In July 2009, Pepsi started marketing itself as Pepsi in Argentina in response to its name being mispronounced by 25% of the population and as a way to connect more with all of the population. The Pepsi Challenges Nooyi has a hard act to follow - one she played a part in shaping. Insiders attribute PepsiCo's success to the combination of the two cultures that were merged to form the company in 1965: the get-things-done expertise of Frito-Lay and the never-take anything- for-granted underdog mentality of Pepsi-Cola, which Coke had nearly put out of business. The result was a contrarian, risk-taking big company that prides itself on acting like a small company and has posted an eye-popping compound annual growth rate of 13% over the past 42 years. Since 2000 the company's revenue has nearly doubled. As PepsiCo's strategy and M&A chief, Nooyi created a growth machine, shedding restaurants and bottlers and buying Tropicana and Quaker Oats. PepsiCo today has a completely different flavor. Old Pepsi: Fritos and Cheetos. New Pepsi: Stacy's Simply Naked (pita chips) and Flat Earth (fruit and veggie chips). Old Pepsi: Diet Pepsi and Mountain Dew. New Pepsi: Naked Juice Pomegranate Blueberry and IZZE Sparkling Clementine. Old Pepsi: ill-fitting acquisitions like North American Van Lines and Wilson Sporting Goods. New Pepsi: joint ventures with compatible partners like Lipton (bottled ice teas) and Starbucks (canned frappuccino). New Pepsi was so early getting beyond soda pop and into the healthier, faster growing noncarbonated beverages (bottled water, sports drinks, and teas) that it commands half the U.S. market, about twice Coke's share, according to Beverage Digest. Not that PepsiCo is anywhere near becoming purely a health-food company, mind you. The bulk of its products (upwards of 70%) are still in what it euphemistically calls "fun for you" foods, as opposed to its two other internal categories, "better for you" and "good for you." But its acquisitions and product reformulations, even in fried-food-loving markets like Mexico, indicate the strategic shift is more than just show. Taking the right side of public opinion, of course, has additional benefits in blunting potential legislation, regulation, and criticism that take aim at junk food and soda pop for
51

obesity rates. It doesn't, however, protect against a sudden change in zeitgeist about products like bottled water - PepsiCo's brand is Aquafina - the most innocent of all beverages but lately under siege as environmentally wasteful. At a time when public opinion and tastes can surprise even a fast-moving company like PepsiCo, the CEO of a consumer products company has to be extraordinarily adaptable. Indra Krishnamurthy Nooyi has one of those incredible, impeccable track records. She grew up in Chennai (formerly Madras), on the southeast coast of India, the daughter of an accountant and a stay-at-home mother who "encouraged us but held us back, told us we could rule the country as long as we kept the home fires burning," she says. Her grandfather, a retired judge, scrutinized report cards, presided over homework, and in his later years prepared her in advance for all the theorems in her geometry book to be sure she'd be able to excel if he were to die before the school year ended. Every night at dinner her mother would present a world problem to Nooyi and her sister and have them compete to solve it as if they were a President or Prime Minister. Though her family is Hindu, Nooyi attended a Catholic school, was an avid debater, played cricket, badgered her parents (and the nuns) until she was allowed to play the guitar, and then formed an all-girl rock band - the first ever at the Holy Angels Convent. Though the band knew only a handful of songs (including "Proud Mary" and "Yummy, Yummy, Yummy"), "we were a sensation," she says exuberantly. Nooyi collected master's degrees in business from the Indian Institute of Management in Calcutta and the Yale School of Management. She did stints at Boston Consulting Group and then held strategic-planning positions at Motorola (MOT, Fortune 500) and the engineering firm Asea Brown Boveri. She was about to go to work for Jack Welch at General Electric (GE, Fortune 500) when former PepsiCo CEO Wayne Calloway, then a GE board member, lured her to PepsiCo instead. He told her PepsiCo needed her more than GE did, and that was exactly the right button to push. When Nooyi stepped into her new job as CEO, she had an unusually large council of elders to guide her: three former PepsiCo CEOs who keep in touch with one another almost daily. They have no organizational ties - they're friends. "She gets help if she wants it, but not if she doesn't," says Reinemund. He stays in contact from his home in Dallas, as does his predecessor, Roger Enrico, chairman of DreamWorks Animation, from La Jolla, Calif. Don Kendall, 86-year-old co-founder of the modern PepsiCo, has an office down the hall from Nooyi's and serves as a consultant. Nooyi says Reinemund will e-mail her back in 30 seconds and offer to fly up to her office in Purchase, N.Y., if she needs advice. "They were my bosses and my best, best friends," she says. They call her on special occasions and sometimes show up for birthdays. Not long after Nooyi joined PepsiCo in 1994, its recipe for growth suddenly wasn't working anymore. Its restaurant operations, which included Pizza Hut, Taco Bell, and KFC, stalled. An attempt to catch up to Coke overseas - Coke had 71% of its revenue from international sales, vs. PepsiCo's 29% - was a disaster. Enrico took a painful round of write-downs in 1996. Coca-Cola would soon embark on a trajectory that would dazzle Wall Street and turn up the heat in the PepsiCo boardroom. As Enrico's strategy chief and head of M&A, Nooyi restructured the company out of the wilderness. She went into suburban America and decided that the fast-food
52

marketplace was saturated and the real estate was a hard investment to maximize Pizza Hut had no breakfast traffic. So PepsiCo spun off the restaurant business in 1997 - no small step, since it would shrink the $31 billion company by a third. She championed the acquisition of Tropicana for $3.3 billion the following year and later the $14 billion acquisition of Quaker, both of which gave PepsiCo some brand names that could help change its reputation. As she explained later in India's Economic Times: "If you want to make a healthy product, you could not use any other Frito brands. To call them the Lays bar or Ruffles bar and expect to use it for breakfast would be crazy." (That didn't stop PepsiCo from coming up with an equally oxymoronic product, Quaker Breakfast Cookies.) Nooyi also gave a pivotal presentation to the board in 1998 - just as the heat from Coke was becoming unbearable - that dissected the rival's business model and made a persuasive case that its double-digit growth was not sustainable. "It was a tour de force," says Enrico, who is convinced that "at that moment the PepsiCo board understood Coke's business model better than Coke's board did." Four months after the presentation Coke stock peaked at $88 and began a long downward slide. In the mid-1990s, Nooyi says, Enrico asked her to devise a strategy that could make PepsiCo the "defining corporation for the 21st century." (He remembers saying he wanted PepsiCo to be more like GE.) She drew up scenarios of what that might look like via path A, B, or C. "We picked a particular path, and Quaker Oats was part of that path," she says, along with three smaller "tuck-in" acquisitions. Enrico made Nooyi his CFO, and to this day, he says, she is "the best negotiator I've ever seen in my entire life." Still, he didn't think she was on track to be CEO because "I constantly felt she needed to go do an operating job." His successor, Reinemund, made Nooyi his president and came to feel differently after she successfully integrated the Quaker acquisition. She proved herself both analytical and visionary. She also shared his conviction that the health movement was for real and demanded true innovation - though when fitness freak Reinemund told her he wanted her to run the New York City marathon with him for PepsiCo, she replied, "Well, Steve, I can run it in over a month: a stop here, some shopping there ..." Very early on she made the right calls on the green issue as well. She so readily loosened the capital expenditure requirements for water- and heatrelated conservation projects in a Frito-Lay meeting eight years ago that executives remember being stunned by it. "Was that a yes? Can we do that?" sustainability VP David Haft recalls asking his boss immediately after. Those kinds of projects now save Frito-Lay $55 million annually. As CEO she's been able to stick to her plans for change, which call for gradually shifting the percentage of "better for you" and "good for you" snacks to 50%, up from 30%, and widening the product portfolio with grains, nuts, and fruits. Nooyi has helped shape a model that enabled PepsiCo to pump out new products. Last year the company offered potato chips in 150 different flavors and 55 different variations on orange juice. In December she recruited Dr. Mehmood Khan from the top R&D job at Takeda Pharmaceuticals to be PepsiCo's first chief scientific officer. That may sound dramatic, but in the area of food research, says Morgan Stanley analyst Bill Pecoriello, U.S. food companies are actually falling behind. Switzerland's Nestl, for example, outspends PepsiCo on R&D (1.6% of sales
53

to 1%) and is calling itself a nutrition company while trying to figure out whether food can prevent disease. Last year PepsiCo bought or partnered with a Bulgarian nut packager, an Israeli hummus maker, and Naked Juice, which makes nutritional beverages like smoothies. "Is Naked Juice a beverage or is it a snack?" Nooyi muses. "I think we can liquefy snacks or snackify liquids." one of nooyi's most stunning talents is the art of suasion. She can rouse an audience and rally them around something as mind-numbing as a new companywide software installation. Her new motto, "Performance With Purpose," is both a means of "herding the organization" and of presenting PepsiCo globally. Because these days, she knows, you can't take even an emerging market for granted. Says Zein Abdulla, president of PepsiCo Europe: "People still tend to think of the emerging markets as, Oh, well, just do your core portfolio and then sometime in the future when they catch up with the West, you'll do the rest." Well, guess what? They've already caught up. Fully half of PepsiCo's Russian beverage business is noncarbonated drinks - juice, water, tea, energy drinks. Global brands like Pepsi don't play the way they used to. "They work," Abdulla says, "but they are not monolithic." CHALLENGES The PepsiCo challenge (to keep up with archrival The Coca-Cola Company) never ends for the world's 2 carbonated soft-drink maker. Its soft drinks include Pepsi, Mountain Dew, and Slice. Cola is not the company's only beverage: Pepsi sells Tropicana orange juice brands, Gatorade sports drink, and Aquafina water. The company also owns Frito-Lay, the world's #1 snack maker with offerings such as corn chips (Doritos, Fritos) and potato chips (Lay's, Ruffles). Its Quaker Foods division offers breakfast cereals (Life), pasta (Pasta Roni), rice (Rice-A-Roni), and side dishes (Near East). A true global giant, Pepsi's products are available in some 200 countries.

54

MARKETING MIX In order to cater to the requirements of identified market segment, an entrepreneur has to develop an appropriate marketing mix. Marketing mix is a systematic and balanced combination of the four inputs which constitute the core of a companys marketing system the product, the price structure, the promotional activities and the place or distribution system. These are popularly known as Four Ps of marketing. An appropriate combination of these four variables will help to influence demand. The problem facing small firms is that they sometimes do not feel themselves capable of controlling each of the four variables in order to influence the demand. Product Features Design Variety Quality Brand name Packaging Size Services Warranty/Guaranty Price List price Discount Allowance Payment period Credit terms Place Location Transport Channels Coverage Delivery Availability Promotion Advertising Personal selling Sales promotion Publicity

A brief description of the four elements of marketing mix is as follows: 1. Product: The first element of marketing mix is product. A Product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. Products include physical objects, services, events, persons, places, ideas or mixes of these. This element involves decisions concerning product line, quality, design, brand name, label, after sales services, warranties, product range, etc. An appropriate combination of features and benefits by the small firm will provide the product with USP (unique selling proposition). This will enhance the customer loyalty in favor of its products. Products and services are broadly classified into:  Consumer products  Industrial products. Consumer products are bought for final consumption; whereas Industrial products are bought by individuals and organizations for further processing or for use in conducting business. Other ways of classifying products are as follows: a. Convenience products:

55

These are consumer products that the customer buys very frequently, without much deliberation. They are low priced of low value and are widely available at many outlets. They may be further subdivided as: y Staple Products: Items like milk, bread, butter etc. which the family consumes regularly. Once in the beginning the decision is programmed and it is usually carried on without change. y Impulse Products: Purchase of these is unplanned and impulsive. Usually when the consumer is buying other products, he buys these spontaneously for e.g. Magazines, toffees and chocolates. Usually these products are located where they can be easily noticed. y Emergency products: Purchase of these products is done in an emergency as a result of urgent and compelling needs. Often a consumer pays more for these. For example while traveling if someone has forgotten his toothbrush or shaving kit; he will buy it at the available price. y Shopping products: b. These are less frequently purchased and the customer carefully checks suitability, quality, price and style. He spends much more time and effort in gathering information and making comparisons. E.g. furniture, clothing and used cars. c. Specialty products: These are consumer goods with unique characteristics / brand identification for which a significant group of buyers is willing to make a special purchase effort. E.g. Ray ban glasses. d. Unsought product These are products that potential buyers do not know exist or do not yet want .For example Life Insurance, a Lawyers services in contesting a Will. The above product decisions are very important to ensure the sale of products. A product has both tangible and intangible components. While buying a product, the customer does not merely look for the physical product, but a bundle of satisfaction. Thus the impact that any product has upon a buyer goes well beyond its obvious characteristics. There is a psychological dimension to all customer purchases; what a customer thinks about a product is influenced by far more than the product itself. For example, the buyer of an air conditioner is not purchasing cooling machine only. He looks for attractive colour and design, durability, low noise, quick cooling, etc. These influencing factors must be considered by the small firms to meet the requirements of different kinds of customers. 2. PRICE: The second element is the price, which affects the volume of sales. It is one of the most difficult tasks of the marketing manager to fix the right price. The variables that significantly influence the price of a product are: demand of the product, cost, competition and government regulation. The product mix includes: determination of unit price of the product, pricing policies and strategies, discounts and level of margins, credit policy, terms of delivery, payment, etc. Pricing decisions have direct influence on the sales volume and profits of the firm. Price, therefore, is an important element of the marketing mix. Right price can be determined through pricing research and by adopting test-marketing techniques. Small firms should think of pricing as a method whereby prices are set with regard to costs, profit targets, competition and the perceived value of products. Because of their simplicity, cost-plus-pricing are attractive to small businesses, though this is not the only mode of pricing utilized by small firms. For example, the profit margin in the cost-plus approach may well be fixed after examining both the nature of the market and the competitor activity within
56

it. It is a mistake for small firms to rely wholly on cost-plus, but very often small firms do that to the detriment of profits and market share. The pricing policies mainly followed by the small firms are: a. Competitive pricing: This method is used when the market is highly competitive and the product is not differentiated significantly from the competitors products. b. Skimming-the-cream pricing: Under this pricing policy, higher prices are charged during the initial stages of the introduction of a new product. The aim is to recover the initial investment quickly. This policy is quite effective when the demand for a product is likely to be more inelastic with respect to price in its early stages; to segment the market into segments that differ in price elasticity of demand and to restrict the demand to a level, which a firm can easily meet. C. Penetration pricing: Under this policy, prices are fixed below the competitive level to obtain a larger share of the market. Penetration pricing is likely to be more successful when the product has a highly elastic demand; the production is carried out on a large scale to achieve low cost of production per unit; and there is strong competition in the market. 3. Promotion: Promotion refers to the various activities undertaken by the enterprise to communicate and promote its products to the target market. The different methods of promoting a product are through advertisement, personal selling, sales promotion and publicity. 4. Place or Physical Distribution: This is another key marketing mix tool, which stands for the various activities the company undertakes to make the product available to target customers. Place mix or delivery mix is the physical distribution of products at the right time and at the right place. It refers to finding out the best means of selling, sources of selling (wholesaler, retailers, and agents), inventory control, storage facility, location, warehousing, transportation, etc. This includes decisions about the channels of distribution, which make the product available to target customers at the right time, at the right place and at the right price. By selecting wrong distribution channels or by using the ones it has traditionally used, a small firm could be depriving it of new market opportunities. In a situation where a small firm has only one primary product, the general rise and fall of sales will lead to a rise and fall of the firm, unless the firm learns to consistently adjust its marketing mix to match consumer demand.

57

Marketing mix of various beverage brands of PepsiCo: Product: PepsiCo deals with a number of beverage brands like Pepsi-cola, 7up, Mirinda, Dew, Slice, Nimbooz, Tropicana, Aquafina. All of these are present in different sizes i.e.200ml, 300ml, 500ml, 600ml, 1L, 2L, tetra pack. Products of PepsiCo comes in glass bottles which are placed under carets while its distribution. Its 600ml and 2L packs are present in plastic bottles. The content of the product and its manufacturing and expiry dates are present on the bottle. Its various brands are present in various flavors like Slice is present in mango flavor; Nimbooz is present in lemon flavor. Price: The pricing policies applied by PepsiCo are competitive pricing and cost plus pricing. Prices are printed on bottles. Some discount is given to distributor who takes the products in bulk. Type 200ml (P, M, ) 250ml & 300ml 600ml 600ml (Soda) 250ml Can Aquafina (1L) 2L Pcs. 24 24 24 24 24 12 09 Rate(Rs.) 168 258 464 264 397 146 482

Place (distribution): Through small and large retailers PepsiCo sells its product in the market. It concentrates not only on the shops on the roads and highways but also on the shops in colonies, lanes, temples etc. It is distributed to the warehouses from production plant, which is further distributed to various distributors (agencies) .Products are distributed to outlets on the basis of the order which has been prepared by the Pre-sales Representative. In Gorakhpur PepsiCo is having a very large coverage area. For range selling PepsiCo has brought the concept of planograming in visicoolers. By applying planograming in the market it can make its all brands available at every outlet. Promotion: Heavy advertising through television is very helpful for it in increasing its sell. Company is also taking help of posters, boards etc. Beside it the company is also gives various kinds of schemes to its distributors and shopkeepers. Time to time the company is giving various prizes and offers on its various brands e.g. Sone Ka Nimbu on 7up. A marketing mix must be consistent for any product. Pricing, for example, must be consistent with packaging and perceived product quality. If one of these is not in line with others, then sales might suffer as a consequence. A manager selecting marketing mix is like a cook or chef preparing meal. Each knows through experience that there is no one best way to mix the ingredients. Different combinations may be used depending upon ones needs and objectives. In the marketing as in cooking, there is no standard formula for a successful combination of ingredients. Marketing mixes vary from company to company and from situation to situation. The right marketing mix is important for any product to have a long life cycle.
58

PRODUCT LIFE CYCLE The Product Life Cycle (PLC) is based upon the biological life cycle. For example, a seed is planted (introduction); it begins to sprout (growth); it shoots out leaves and puts down roots as it becomes an adult (maturity); after a long period as an adult the plant begins to shrink and die out (decline). In theory it's the same for a product. After a period of development it is introduced or launched into the market; it gains more and more customers as it grows; eventually the market stabilises and the product becomes mature; then after a period of time the product is overtaken by development and the introduction of superior competitors, it goes into decline and is eventually withdrawn. However, most products fail in the introduction phase. Others have very cyclical maturity phases where declines see the product promoted to regain customers.

Introduction. The first stage of a product life cycle is the introduction or pioneering stage. Under this state the fixed costs of marketing and production will be high, competition is almost non-existent, markets are limited and the product is not known much. Prices are relatively high because of small scale of production, technological problems and heavy promotional expenditure. Profits are usually non-existent as heavy expenses are incurred for introducing the product in the market. To introduce the product successfully, the following strategies may be adopted: a. Advertisement and publicity of the product. Money back guarantee may be given to stimulate the people try the product. b. Attractive gift to customers as an introductory offer.

59

c. Attractive discount to dealers. d. Higher price of product to earn more profit during the initial stages. Growth The sales as well as the profits increase rapidly as the product is accepted in the market. The promotional expenses remain high although they tend to fall as a ratio to sales volume. Quite often, smaller firms move into the market during the growth phase. With their flexibility they can move very quickly and capture a valuable part of the market without the huge investment risks of the development phase. In this stage, the competition increases and distribution is greatly widened. The marketing management focuses its attention on improving the market share by deeper penetration into the existing markets and entry into new markets. Sometimes major improvements also take place in the product during this stage. The following strategies are followed during the growth stage: a. The product is advertised heavily to stimulate sale. b. New versions of the product are introduced to cater to the requirements of different types of customers. c. The channels of distribution are strengthened so that the product is easily available wherever required. d. Brand image of the product is created through promotional activities. e. Price of the product is competitive. f. There is greater emphasis on customer service. Competitors are attracted into the market with very similar offerings. Products become more profitable and companies form alliances, joint ventures and take each other over. Advertising spend is high and focuses upon building brand. Market share tends to stabilize. Maturity: The product enters into maturity stage as competition intensifies further and market gets stabilized. There is saturation in the market as there is no possibility of sales growth. The product has been accepted by most of the potential buyers. Profits come down because of stiff competition and marketing expenditures rise. The prices are decreased because of competition and innovations in technology. This stage may last for a longer period as in the case of many products with long-run demand characteristics. But sooner or later, demand of the product starts declining as new products are introduced in the market. Product differentiation, identification of new segments and product improvement are emphasized during this stage. Those products that survive the earlier stages tend to spend longest in this phase. Sales grow at a decreasing rate and then stabilize. Producers attempt to differentiate products and brands are key to this. Price wars and intense competition occur. At this point the market reaches saturation. Producers begin to leave the market due to poor margins. Promotion becomes more widespread and uses a greater variety of media. In order to lengthen the period of maturity stage, the following strategies may be adopted:a. Product may be differentiated from the competitive products and brand image may be emphasized more. b. The warranty period may be extended. c. Reusable packaging may be introduced.
60

d. New markets may be developed. e. New uses of the product may be developed. Decline: This stage is characterized by either the products gradual displacement by some new products or change in consumer buying behaviour. The sales fall down sharply and the expenditure on promotion has to be cut down drastically. The decline may be rapid with the product soon passing out of market or slow if new uses of the product are found. Profits are much smaller and companies need to assess their investment policies, looking towards investing in newer and more profitable product lines. At this point there is a downturn in the market. For example more innovative products are introduced or consumer tastes have changed. There is intense price-cutting and many more products are withdrawn from the market. Profits can be improved by reducing marketing spend and cost cutting. As far as possible, attempts should be made to avoid the decline stage. But if it has started, the following strategies may be useful: a. The promotion of the product should be selective. Wasteful advertising should be avoided. b. The product model may be abandoned and all the good features may be retained in the new model of the product. c. Economical packaging should be introduced to revive the product. d. The manufacturer may seek merger with a strong firm. Problems with Product Life Cycle In reality very few products follow such a prescriptive cycle. The length of each stage varies enormously. The decisions of marketers can change the stage, for example from maturity to decline by price-cutting. Not all products go through each stage. Some go from introduction to decline. It is not easy to tell which stage the product is in. Remember that PLC is like all other tools. Use it to inform your gut feeling.

61

MARKETING STRATEGIES DURING DIFFERENT LIFE CYCLE STAGES

62

LIFE STAGE OF BEVERAGE INDUSTRY OF PEPSICO From the above chart it is clear that Beverage Industry of PepsiCo is in Growth stage of Product Life Cycle, because its selling and profit is continuously growing. Company is concentrating on its product quality so that it can compete with its competitors present in the market. Its advertisements are different for different brands. Even slogans for various brands are different from each other like for Dew-Darr Ke Aage Jeet Hai. Company is continuously giving its full affords to increase its coverage area BRAND STRATEGY AND ITS ROLE IN INDIA BRANDThe American Marketing Association (AMA) defines a brand as a "name, term, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of other sellers. Therefore it makes sense to understand that branding is not about getting your target market to choose you over the competition, but it is about getting your prospects to see you as the only one that provides a solution to their problem. The objectives that a good brand will achieve include:
y y y y y

Delivers the message clearly Confirms your credibility Connects your target prospects emotionally Motivates the buyer Concretes User Loyalty

BRANDING STRATEGYTo succeed in branding you must understand the needs and wants of your customers and prospects. You do this by integrating your brand strategies through your company at every point of public contact. Your brand resides within the hearts and minds of customers, clients, and prospects. It is the sum total of their experiences and perceptions, some of which you can influence, and some that you cannot. A strong brand is invaluable as the battle for customers intensifies day by day. It's important to spend time investing in researching, defining, and building your brand. After all your brand is the source of a promise to your consumer. It's a foundational piece in your marketing communication and one you do not want to be without. A key step in
advertising development is specifying the marketing objective for the advertising. That is, what do you want the advertising to achieve? Do you want it to increase brand awareness, attract new customers, increase brand loyalty, encourage add-on purchases, motivate people to switch from competitive brands to your brand, increase frequency of use, reinforce ongoing use, etc.? As an example, the marketing objective for Hallmark s brand insistence advertising campaign in the mid 90 s was very simple and tactical: to get consumers to flip the card over and look for the brand name on the back cover. 63

Make sure the objective is quantifiable and measurable. During your brand positioning work, you should have developed the brand promise including identification of the brands relevant differentiating benefit. Next, augment the brand promise with proof points or reasons to believe. Proof points may include the following: Product features and attributes (including the design itself or its formula or ingredients) Performance features, statistics and research results Performance guarantees Service claims Side-by-side comparisons Third party endorsements

Advertising Rules of Thumb: Try to budget between 8 and 12% of revenues on advertising and other marketing activities. (This obviously varies significantly by company and industry. An average company spends approximately 6% of sales on advertising alone. Advertising expenditures for computer and office equipment are as low as .09% versus 16.8% for toys, dolls, and games. [Source: Paul A. Scipione, Too Much or Too Little? Public Perceptions of Advertising Expenditures Journal of Advertising Research 24, 6 December 1984/January 1985: 23-26.]
y

y y y y y y y

y y y y y

Industrial companies tend to spend less on advertising (1% to 5% typically) than consumer products companies.) You should spend more on advertising and marketing if the following conditions exist. You are building a new brand You are launching a new product or service Your product offering is large and complex You charge premium prices You sell products and services in a low involvement category (typically low priced items for which there is little risk of failure) You are selling commodity products (advertising will be the primary differentiator) Spend approximately $1 on proactive publicity for every $10 you spend on advertising. (PR budgets are 1% of a companys revenues on average.) It will multiply the effectiveness of your advertising. (Advertising in trade magazines also gives you a relationship with the publications, alerts you to editorial opportunities, and sometimes will impact your brands presence in articles.) Production costs are usually 10% of the media buy. Reasons for brand failure:Arrogance, Greed, Complacency
64

Inconsistency.

Brand postioning & punchlines... Little did our Beloved "NETAJI" Subhash chandra Bose knew that when he requested his followers Tum Mujhe Khoon Do, Main Tumhe Azaadi Doonga", he was actually marketing a product that isFREEDOM with this Punchline. In the process an old women donated all the jewellery she had for the cause of freedom even when she had lost her only child in the battle of freedom, to Netaji only due to the powerful oratory of the great leader. Such is the impact of words.Marketers also know the importance of powerful words and use them as Punchlinesfor their product/brand endorsements. Although the Punchline as a marketing tool comes under Advertising which itself comes under the Promotion of Marketing Mix. But there is a strong need of paying special attention to these One-liners or Punchlines or Ad slogans.

POSITIONING Subroto Sengupta in his book Brand Positioning has defined the concept of positioning as: The Position of a brand is the perception it brings about in the mind of a target customer.This perception reflects the essence of brand in terms of its functional and non-functional benefits in the judgment of that customer. It is relative to the perception, held by that consumer, of competing brands, all of which can be represented as points or positions in his or her perceptual space and together, make up a product class. In short position represents the whole or overall perception of that brand in that consumers mind and it is always a relative concept.Perhaps Charles Mittelstadt has defined Positioning more accurately as "Positioning refers to how you want your brand thought about in connections with competitors in its product category. It needs to be specific to your brand aimed at a specific target audience. "This definition clearly states the importance of Positioning for the success of any brand. It is like that indispensable vitamin to the body without whose the body will collapse. So Positioning can make or break a brand. Therefore, a confused Positioning can simply kill the brand. A clear Positioning will always be one of the success factor. This is the place where Punchline comes into act. If you have to Position your brand perfectly in the mind space of the customer, your Punchline must be so accurate and appealing that it neither erases from the mind nor can be replaced by any other competing brands Punchline.

65

COMPETITON
The competitors to the products of the company mainly lie in the non-alchoholic beverage industry consisting of juices and soft drinks. The key competitors in the industry are as follows:

Coca-Cola- The Coca-Cola challenges to keep up with archrival ,the Pepsi-co never ends for the worlds 2, carbonated soft drink maker. The companys soft drinks include Coke, Sprite, and Fanta. Coca-Cola is not the companys only beverage; Coca- Cola sells New Chilled Minute Maid juice brands,Aquarius sports drink, and Kinley Water.Pepsi-co and Coca-Cola hold together a market share of 95% out of which 60.8% is held by Coca-Cola and the rest belongs to Pepsi.

Nestle- Nestle does not give a tough competition to Pepsi as it mainly deals with milk products, baby foods and choclates. But the iced tea that is Nestea which has been introduced into the market by Nestle provides a considerable competition amount of competition to the products of the company. Iced tea is one of the closest substitutes to colas as it is a thirst quencher and is much healthier than other fizz drinks.

66

Red Bull Red-Bull in Pakistan, is one of the most trusted brands as it has been operating ever since times and people have laid all their trust in the company and the products of the company. Red Bull has introduced into the market Energy Drink. These products give a astrong competition to Maaza and the latest product Minute Maid Pulpy Orange. Pepsi TYPE Dark Cola Diet / Low calorie Low Carb Lemon Lime Soda Cherry soda Orange soda l e di erent brands of soda competing with each other : PEPSI Version Pepsi Coke Version Coca-cola

Diet Pepsi/ Pepsi light Diet coke Tab Coca-cola Pepsi one Pepsi max Zero Coca-Cola Light Pepsi Edge Sierra mist , 7Up Wild cherry pepsi Tropicana twister Slice Mirinda Sunkist kas Tropicana Lipton brisk Coca-Cola C2 Sprite Cherry coke Fanta Minute Maid

Orange juice Iced Tea

Minute maid Nestea

Water

Aquafina

Dasani Bonaqua Kinley

67

Root Beer Sports drink

Mug Root beer Gatorade

Barqs Powerade

Citrus soda

Mountain dew

Mello yello Vault fresca Vanilla coke

Vanilla flavored

Pepsi vanilla

Lime flavored

Pepsi lime

Coca cola with lime Diet coke with lime

Lemon flavored

Pepsi twist

Coca cola with lemon

(Real war between Pepsi & coke) Every food companies have their competition. Pepsis main competitor is CocaColaco. Both have been selling thirst quenchers for 100 years that are now global brands. Their bottles move through the worlds most pervasive distribution network. Coke is mainly a franchise driven operation with a company supplying its soft drink concentrate to its soft bottles around the world Coke management releases that a soft drink is a convenience as well as an impulse product. According the companys expertise lies in consumers marketing. Idea is to reduce the effect span as Also coke will be experimenting with mobile dispensing units at beaches and stadiums going out towards consumers the much as possible. Cokes infrastructure plan include setting up new subsidiaries. It is also considering a 35 Greenfield venture to set-up a model plant in westerns corridor most likely in Gujarat. This will have 4 product lines with a capacity of 600 bottles per minutes with a build in flexibility to about top different and flavors and sizes. Another option for building capacity is to bringing in bottlers from overseas to invent jointly in fresh capacity. The company wants to go a stem further and set-up COCA-COLA institute a training facility for bottlers. Coke continues to stay with its multi brand strategy. This enhances the ability to leverage self-space at the retail outlet. It also gives then flexibility to offer price on brand others then lead once. Coke has launched MAJA pineapple and MAJA orange. As far as new product launched is concerned coke plans a dual brand approach by bringing in FANTA lemon. This comes about because volumes of LIMCA have increased by 20% shares, which have an 80% - share of the cloudy lemon segmentSo this dual brand approach will extend to that flavors too. Pepsi s decision to take in company owned bottling operation (COBO) alongside franchise has proved to be winning edge over its competitor. By 1994 Pepsi s has bought over five bottles in the key ma rkets.
68

This ensuring maximum control. The franchise now sees the company not just as advisor but also as carrying the weight of experience. Company system and franchisee system can now be properly aligned to meet the required objectives. On expanding reach and availability 80% of all cold drinks are consumed at the point of purchase (POP) rather than at home. The fountain initiative has paid off in higher of countrywide and they offer consumers a whole new way experience soft drinks. Also expanding teach and availability. Coke tied up with Indian oil to set up dispensing units at petrol pumps. Pepsi followed suit by striking a deal with Bharat Petroleum. Pepsi has mainly focused a brand Pepsi. Their strategy has been to keep pace with the market growth rate in non-Colas but to emerge as the definite cola they have put there might behind the brand Pepsi as the flagship brand. In 1987, Pepsi ranked 29 in the fortune list of the 500 largest industrial corporation in the U.S. Coca Cola was way down at 54, while Pepsi Co. improved its position from 34 in 1986 Coca Cola tumbled to 38 after missive public out cry, the company had to reintroduce the original coke classic. Pepsi has so far made in roads in 151countries (150 before India) including the much-publicized ventures in the soviet Union and China. Patience in Pepsi Co. s long suit. At the base of every beverage business lies the all important secret formula of success the Concentrate . In india the concentrate is prepared by Pepsi food limited representatives of Pepsi-Cola international. They came, spent, and conquered. The size of their combined business adds up to more than Rs. 5500 crore. The equity investment put in it tots up to a humungous $ 1347 million (Rs. 5700 crore). Yet almost 10 year after Pepsi Coca-cola Company entered India, birth are yet to turn a profit. Their accoumulated losses are estimated to over Rs. 800 crore. In a bid to comer a larger market share, invariably, either Pepsi or Coke ends up raising the stakes to a point where the math simply doesn t add up. Just that the two cola giants have been in an unseemly hurry to grow the Indian market and, at the same time deny each other any advantages, irrespective of whether it makes economics sense. in the mid 90 s breakeven was pegged at 40 million cases. Today, both players together do 150 million cases, but break-even is still elusive. The battle spilled into almost every area of operations in early 1999, that discounts were also unleashed. If the industry norm was around three to four bottles free with every case, the Cola majors began to offer six to seven bottles. In 2000 particularly in the month coke went berserk, giving 500/0 discounts. Both cola warriors targeted a clutch of key accounts about 67% of the total retail base, primarily restaurants, movie halls and hotels. In many cases the owner would play one against the other and drive a hard bargain. In may cases the cola companies. Paid close to Rs. 100 per case of expected off take as advance to secure a monopoly over the key account. The gross margins o~ a case of returnable glass bottles was just Rs. 40. In India, a single-serve P & T bottles was simply not cost effective. Aluminum cans too suffered from the same problem effective. Aluminum cans too suffered from the same problem. Now every year, both companies had to invest in fresh glass capacity and crates. Back-of-the envelop calculations suggested that to put an additional million bottles in the market required close to Rs. 40 crore investment in glass and carats, and glas bottles had to be s replaced every four year after they had done 40 cycles, during which time
69

depreciation had been charged. Till the cola companies began to concentrate on the urban centers. As soon as they pushed into the winter land, the first sings of problems surfaced. In a state like Tamil Nadu the off take per 1000 people was barely 0.9 as a result, when a Pepsi or a coke truck went into interior markets, the glass simply wouldn t come black fast, either consumption was low or the volumes were being split between the volumes were being spilt between the two competitors as a market. But that would have been completely out or character for the company. it is a bit like asking the Brazilian Soccer team to adopt German-Style total football . Across global market Pepsi has always reveled in grabbing share away from coke. But in India it finds itself in a peculiar position. It is the Numero Uno brand, outselling both coke and Thums up put together. That s helped Pepsi s Indian team to build quite a reputation. Pepsi has managed to constantly find ways to connect with the youth. So it Coke is the universal drink, which cuts across-age groups, Pepsi is the icon of the real cola quaffers Young-people between the ages of15-29.

COMPANY PROFILE INTRODUCTION Name of company Name of industry Founded Headquarters Stock Index Type Products Key People Revenue Operating Income Net Income Employees Website : The Coca-cola : Beverage : 1892, By Asa Griggs Candler : Atlanta, Georgia, USA : NYSE: KO : Public co. : Water and Non -alcoholic soda drinks : E. Neville Isdell, CEO and Chairman : $ 24.088 billion USD (2008) : $6.308 billion USD (2008) : $5.080 billion USD (2008) : 71,000 (2008) : www.thecoca-colacompany.com
70

The company is best known for its flagship product Coca-Cola, invented by pharmacist John S. Pemberton in 1886. The Coca-Cola formula and brand was bought in 1889 by Asa Candler who incorporated The Coca-Cola Company in 1892. Besides its namesake Coca-Cola beverage, Coca-Cola currently offers nearly 400 brands in over 200 countries or territories. The company operates a franchised distribution system dating back to 1889 where TCCC only produces syrup concentrate which is then sold to various bottlers throughout the world who hold an exclusive territory. The Coca-Cola Company is headquartered in Atlanta, Georgia. Its stock is listed on the NYSE and is part of DJIA and S&P 500. Coca-Cola is the giant of the beverage industry worldwide. Their coke and diet coke hold the number 1 and number 3 spot in the U.S. Nevertheless more the 70% of their sales come from outside the U.S. To the world at large, Coca-Cola is Coca-Cola. Most people do not distinguish between The Coca-Cola Company, a global corporation, and Coca-Cola bottling companies. That presents the Company with a unique challenge as the co. manages the environmental impact of the business. The Coca-Cola Company does not own or manage most bottling companies, nor does the co. have the legal right to control their environmental practices or to require them to report on such practices. Although the companys system (The Coca-Cola Company and the bottling partners) is not a single entity from a legal or managerial perspective, the co. makes every effort to positively influence environmental activities and policies throughout the system. STORY OF COCA-COLA It all started in the year 1780. A man called Jacob Schweppe's invented the semicontinuous "Geneva System." This system consisted of a carbon dioxid generator, a gasometer, and a pump that forced the carbon gas into a carbonating chamber, where it mixed with liquid. When the liquid was thoroughly carbonated, it was drawn off, and the operation was repeated again and again. This was the first step in making soda. The wonderful idea of Coca-Cola started way back in 1886. Dr. John S. Pemberton invented this drink as a tonic for most common ailments. Composed of extracts from the coca leaf and the kola nut, this caused his drink to be slightly addictive. The name, Coca-Cola, fits well with the main ingredients, and was given to Mr. Pemberton by his bookkeeper, Mr. Frank Robinson. He also penned the famous Coca-Cola logo in unique script. In 1887, Pemberton found out that carbonated water was tastier than plain water, the coca-cola beverage as we know it today was born.
71

The drink was originally sold for 5 cents a glass at Jacobs Pharmacy in Atlanta. Mr. Pemberton started getting sick and the next year he decided to sell his company. He sold it off in parts, but later a man named Asa Candler acquired total ownership of it. Pemberton died in 1888 and with Candler in charge sale rose from 9,000 gallons of syrup in 1890, to 370,877 gallons in 1900. It has ventured regionally out of Atlanta to other states of United States since the late 19th century and its signature contour bottle was first manufactured in the early 20th century to distinguish themselves and assuring the genuine Coca-Cola. Though the company grew rapidly and roared into some European countries during the 1900s, its presence worldwide grew swiftly only after World War II. Year after year, the company has been discovering new foreign markets to bring higher profits as to fulfill its ultimate obligation to provide consistently attractive returns to the owners of the company and to enlarge the business. More than 15 Billion retailers around the world sell Coca-Cola products. HISTORY OF COCA-COLA: I would like to talk about the history of Coca-Cola. I have divided my talk into three main parts: 1. The period before World War (1914). 2. The inter-war period. 3. And, the period from World War II to our days. During the first year, sales of Coca-Cola averaged nine drinks a day, adding up to total sales for that year of $50. Since the year's expenses were just over $70, Dr. Pemberton took a loss. Today, products of The Coca-Cola Company are consumed at the rate of more than one billion drinks per day. We can be certain that the brand will continue to be part of our daily lives for a very long time. After the fall of the Berlin Wall, the Company invested heavily to build plants in Eastern Europe. From 1901 to 1910, sales progressed from 4000l. To counter the problem, Robert Woodruff was named at the head of the company. Coke also became the first sparkling soda that had been drunk in space, since 200 space cans were specially designed to be drunk in weightlessness. In 1893 the soft drink is registered and served at soda-bars to the price of 5 cent a glass. The same year, Coca-Cola began to advertise on television by sponsoring some famous programs like The Mickey Mouse Club. In 1990s,
72

political and economic changes opened vast markets that were closed or underdeveloped for decades. From the beginning, the sales of coca-cola increased continuously. In 1950 the first cans of coke were produced, initially for American military bases located outside the USA. In 1919, the end of the war and of the restrictions allowed the production and the sales to increase again. Lawyers of the coca-cola company prosecuted brands as Koke Company, Karo-Cola, Curo-Cola, Sola-Cola, Koka-nola and Taka-Cola. Other brands like Sprite were launched in the sixties. Because of its success, coca-cola became the target of plenty of imitators. Most consumers dont realize this, but were actually not one and the same. We primarily manufacture concentrate beverage bases and syrups that we sell to our bottling partners, and a significant portion of our work focuses on creating and marketing our brands. Our bottling partners produce the majority of our finished beverage products. They combine our concentrate beverage bases and syrups with carbonated water or sweetener or both, depending on the product. Then they produce and package the finished beverages in authorized containers and sell them to our customers, THE COCA-COLA & BOTTLING PARTNERS The company has more than 300 bottling partners globally. Because much of the environmental impact of our business occurs beyond Company-owned facilities, we work closely with our bottling partners to improve our systems overall performance. We take a system wide view of our environmental impact, and collectively develop strategies and share best practices. The Coca-Cola Environmental Council includes senior environmental managers from the Company. Our Company owned bottling plants and six of our largest bottling partners, who together own and operate more than 200 production facilities (representing approximately 47 percent of global unit case volume). The six bottling partners are Coca-Cola Enterprises, Coca-Cola FEMSA, Coca-Cola Hellenic Bottling Company, SABMiller, Coca-Cola Amatil and Coca-Cola West Japan. The operations of these bottling partners cover significant portions of North America, Europe and Eurasia, Latin America, Africa, Australia and Japan.

73

LARGEST BOTTLING PARTNERS AND CO. EQUITY STAKE Coca-Cola Enterprises Inc. (CCE) CCE is the worlds largest marketer, producer and distributor of Coca-Cola beverages. CCE operates in 46 states in the United States and in Canada and is the exclusive Coca-Cola bottler in six European countries.
y y y

Percent of the Companys 2008 worldwide unit case volume :- 19% Ownership interest as of December 31, 2008 :- 35% Company beverages as percent of each bottlers 2008 unit case volume :- 93%

Coca-Cola FEMSA, S.A.B. de C.V. (Coca-Cola FEMSA) Coca-Cola FEMSA is the third-largest Coca-Cola bottler in the world. Coca-Cola FEMSA operates in Mexico, as well as in eight countries in Central America and South America.
y y y

Percent of the Companys 2008 worldwide unit case volume :- 9% Ownership interest as of December 31, 2008 :- 32% Company beverages as percent of each bottlers 2008 unit case volume :- 96%

Coca-Cola Hellenic Bottling Company S.A. (Coca-Cola HBC) Coca-Cola HBC is the fourth-largest bottler of Coca-Cola beverages, operating in Nigeria and 28 countries in Europe, with a total population of more than 550 million.
y y y

Percent of the Companys 2008 worldwide unit case volume :- 8% Ownership interest as of December 31, 2008 :- 23% Company beverages as percent of each bottlers 2008 unit case volume :- 93%

Coca-Cola Amatil Limited (Coca-Cola Amatil) Coca-Cola Amatil is the largest nonalcoholic beverage company in the Asia-Pacific region and one of the worlds top six Coca-Cola bottlers.
y y y

Percent of the Companys 2008 worldwide unit case volume :- 3% Ownership interest as of December 31, 2008 :- 32% Company beverages as percent of each bottlers 2008 unit case volume :- 90%

74

HISTORY OF BOTTLING Coca-Cola originated as a soda fountain beverage in 1886 selling for five cents a glass. Early growth was impressive, but it was only when a strong bottling system developed that Coca-Cola became the world-famous brand it is today. 1894 A modest start for a bold idea In a candy store in Vicksburg, Mississippi, brisk sales of the new fountain beverage called Coca-Cola impressed the store's owner, Joseph A. Biedenharn. He began bottling Coca-Cola to sell, using a common glass bottle called a Hutchinson. Biedenharn sent a case to Asa Griggs Candler, who owned the Company. Candler thanked him but took no action. One of his nephews already had urged that Coca-Cola be bottled, but Candler focused on fountain sales. 1899 The first bottling agreement Two young attorneys from Chattanooga, Tennessee believed they could build a business around bottling Coca-Cola. In a meeting with Candler, Benjamin F. Thomas and Joseph B. Whitehead obtained exclusive rights to bottle Coca-Cola across most of the United States (specifically excluding Vicksburg) -- for the sum of one dollar. A third Chattanooga lawyer, John T. Lupton, soon joined their venture.

1900-1909 Rapid growth The three pioneer bottlers divided the country into territories and sold bottling rights to local entrepreneurs. Their efforts were boosted by major progress in bottling technology, which improved efficiency and product quality. By 1909, nearly 400 Coca-Cola bottling plants were operating, most of them family-owned businesses. Some were open only during hot-weather months when demand was high. 1916 Birth of the contour bottle Bottlers worried that the straight-sided bottle for Coca-Cola was easily confused with imitators. A group representing the Company and bottlers asked glass manufacturers to offer ideas for a distinctive bottle. A design from the Root Glass Company of Terre Haute,
75

Indiana won enthusiastic approval in 1915 and was introduced in 1916. The contour bottle became one of the few packages ever granted trademark status by the U.S. Patent Office. Today, it's one of the most recognized icons in the world - even in the dark! 1920s Bottling overtakes fountain sales As the 1920s dawned; more than 1,000 Coca-Cola bottlers were operating in the U.S. Their ideas and zeal fueled steady growth. Sixbottle cartons were a huge hit after their 1923 introduction. A few years later, open-top metal coolers became the forerunners of automated vending machines. By the end of the 1920s, bottle sales of Coca-Cola exceeded fountain sales.

1920s and 1930s International expansion Led by longtime Company leader Robert W. Woodruff, chief executive officer and chairman of the Board, the Company began a major push to establish bottling operations outside the U.S. Plants were opened in France, Guatemala, Honduras, Mexico, Belgium, Italy, Peru, Spain, Australia and South Africa. By the time World War II began, Coca-Cola was being bottled in 44 countries.

1940s Post-war growth During the war, 64 bottling plants were set up around the world to supply the troops. This followed an urgent request for bottling equipment and materials from General Eisenhower's base in North Africa. Many of these war-time plants were later converted to civilian use, permanently enlarging the bottling system and accelerating the growth of the Company's worldwide business.

76

1950s Packaging innovations For the first time, consumers had choices of Coca-Cola package size and type -- the traditional 6.5-ounce contour bottle, or larger servings including 10-, 12- and 26-ounce versions. Cans were also introduced, becoming generally available in 1960.

1960s New brands introduced Following Fanta in the 1950s, Sprite, Minute Maid, Fresca and TaB joined brand Coca-Cola in the 1960s. Mr. Pibb and Mello Yello were added in the 1970s. The 1980s brought diet Coke and Cherry Coke, followed by POWERADE and DASANI in the 1990s. Today hundreds of other brands are offered to meet consumer preferences in local markets around the world. 1970s and 80s Consolidation to serve customers As technology led to a global economy, the retailers who sold Coca-Cola merged and evolved into international mega-chains. Such customers required a new approach. In response, many small and medium-size bottlers consolidated to better serve giant international customers. The Company encouraged and invested in a number of bottler consolidations to assure that its largest bottling partners would have capacity to lead the system in working with global retailers. 1990s New and growing markets Political and economic changes opened vast markets that were closed or underdeveloped for decades. After the fall of the Berlin Wall, the Company invested heavily to build plants in Eastern Europe. And as the century closed, more than $1.5 billion was committed to new bottling facilities in Africa. 21st Century The Coca-Cola bottling system grew up with roots deeply planted in local communities. This heritage serves the Company well today as people seek brands that honor local identity and the distinctiveness of local markets. As was true a century ago, strong locally based relationships between Coca-Cola bottlers, customers and communities are the foundation on which the entire business grows.
77

EUROPE COCA-COLA HELLENIC BOTTLING COMPANY Coca-Cola Hellenic (CCHBC) is the largest Coca-Cola bottler in Europe. It operates in 28 countries serving a population of 540 million people. The co. manages the portfolio of markets to balance a stable source of revenues and cash flows with significant growth opportunities. The co. groups European countries into three segments. The countries included in each segment share similar levels of political and economic stability and development, regulatory environments, growth opportunities, customers and distribution infrastructures. The business consists of producing, selling and distributing non-alcoholic beverages. In 2006, the co. sold over 1.7 billion unit cases, generating net sales revenue of 5.6 billion. The product portfolio consists of 147 carbonated soft drinks, or CSDs and 461 non-carbonated soft drinks, or nonCSDs across the water, juice and juice drinks, energy drinks, sports drinks, and readyto-drink iced tea and coffee categories. In 2006, CSDs accounted for 67% and nonCSDs accounted for 33% of the sales volume. The co. offers the products in a range of package sizes as the co. strives to achieve profitable volume growth across different retail channels and consumption occasions. Coca-Cola Hellenic operates in three business segments, each comprised of countries with similar levels of economic growth prospects: Established Countries: Italy (northern & central), Greece, The Republic of Ireland, Northern Ireland, Austria, Switzerland and Cyprus. Developing Countries: Poland, Hungary, the Czech Republic, The Slovak Republic, Croatia, Lithuania, Estonia, Latvia and Slovenia. Emerging Countries: Nigeria, Russia, Romania, Bulgaria, Ukraine, Serbia, Montenegro, Bosnia and Herzegovina, FYROM, Belarus, Armenia and Moldova. Coca-Cola Hellenic is strategically positioned to profit from European Union enlargement. Eight Coca-Cola Hellenic countries are the three Baltic states of Estonia, Latvia and Lithuania, as well as Hungary, Poland, the Czech Republic, Slovakia and Slovenia, joined the EU on May 1, 2004. Two other Coca-Cola Hellenic countries are Romania and Bulgaria, joined in January 2007.

78

EU enlargement, with its reduction of trade barriers, the normalization of food legislation, environmental policy and marketing legislation, and the anticipated increase in income of the residents in these new EU countries, will enhance the company's already substantial scale benefits in procurement savings, knowledge sharing, investment planning and best practices from its operations in 28 countries. We have access to the worlds major capital markets and an extensive international investor base. Coca-Cola Hellenic shares are listed on the Athens Stock Exchange (ATHEX: EEEK), with secondary listings on the London (LSE: CCB) and Australian (ASX: CHB) Stock Exchanges. Coca-Cola Hellenics American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE: CCH). Our proposed dividend for 2006 is 0.32 per share. COLOMBIA Most of The Coca-Cola Company's beverages are produced, distributed and sold in Colombia by our bottling partner FEMSA. FEMSA is a Latin-American owned company that was founded in 1979 in Mexico. FEMSA employs more than 2,000 workers at its six plants in Colombia, which are unionized at about 9 times the national average. The company has permanent relationships with multiple Colombian unions, including SINALTRAINAL, SINALTRAINBEC and SINTRAINDEGA, the largest unions in the country representing bottling plant workers. Anyone who works for FEMSA must be at least 18 years old, and wages and work hours are regulated by national law and reinforced in collective bargaining agreements. All workers permanent employees and contractors alike - are paid at least 30 percent above the nation's minimum wage. LOCATION OF BUSINESS The company is spread all over the world throughout the all six continents. 1) Europe 2) Asia 3) Africa 4) North America 5) Latin America 6) South Pacific
79

7) EUROPE Name of Countries: Belgium (Franois) Belgium (Nederland) Germany Spain Ireland Lithuania Nederland Portugal Serbia Ukraine Czech Republic French Iceland Luxembourg Norway Romania Finland Bulgaria Cyprus (English) Croatia Switzerland (Deutsch) Cyprus Great Britain Israel Magyarorszag Austria Russia Sweden Denmark Switzerland (Franois) Estonia Greece Italy Hungary Poland Slovakia Turkey

LATIN AMERICA Name of Countries: Argentina Colombia Guatemala Panama Venezuela Bolivia Costa Rica Honduras Paraguay Dominican Republic Brazil Ecuador Mexico Peru Chile El Salvador Nicaragua Uruguay

80

ASIA Name of Countries: India Kuwait Palestine Syria Yemen United Emirates Arab Bahrain Lebanon Philippines Taiwan Singapore Iraq Malaysia Qatar Hong Kong China Jordan Oman Saudi Arabia Japan Korea

SOUTH PACIFIC Name of Countries: Australia New Zealand French Polynesia

NORTH AMERICA Name of Countries: United (English) States Estados (Espanol) Unidos Canada (English) Canada (Franois)

AFRICA Name of Countries: Algeria Burkina Faso Angola Burundi Benin Cuba Verde Botswana Cape Verde

81

Comoros Eritrea Guinea Kenya Mali Niger Seychelles Chad Zimbabwe

Ivory Coast Gabon Guinea Equatorial Lesotho Mauritania Nigeria South Africa Tunisia Republic of Congo

Djibouti Gambia Guinea Bissau Madagascar Mozambique Rwanda Swaziland Uganda Democratic Republic of Congo

Egypt Ghana Ethiopia Malawi Morocco Senegal Tanzania Zambia

JOINT VENTUR Nestea is the iced tea brand owned by Nestle, but controlled in most global markets by Beverage Partners Worldwide (BPW), a joint venture between Coca-Cola and Nestle. The business operates in more than 40 countries, marketing Nestea as well as other ready-to-drink chilled teas. Until recently it also managed RTD flavoured milks and chilled coffees, including several Nescafe spin-offs. Those were excluded from the joint venture in 2007, and Coke subsequently agreed a separate joint venture with Illy Coffee to market RTD coffees. Despite the marketing prowess of Coke and Nestle, Nestea currently trails well behind competitors, notably Lipton and Snapple, in most developed markets. BOARD OF DIRECTORS
y

E. Neville Isdell: Chairman, Board of Directors, and Chief Executive Officer (CEO). He was elected on June 1, 2004. He is the 12th chairman in the board. Hindu Business Line - The fizz is back

Muhtar Kent: President and Chief Operating Officer (COO)

Mr. Alexander B. Cummings is chief administrative officer (CAO), The Coca-Cola Company. The CAO structure consolidates key Center functions in a purposeful

82

approach to effectively support our business operations. The key Center functions include Legal, Public Affairs and Communications, Human Resources, Global Community Connections, Strategic Planning, Information Technology, Product Integrity, Research & Innovation, and Science. Born in Liberia, West Africa, Mr. Cummings joined The Coca-Cola Company in 1997 as region manager, Nigeria. In 2000, he was named president of the Company's North & West Africa Division. In March 2001, he became president and chief operating officer of the Africa Group, responsible for the Company's operations in Africa, encompassing a total of 56 countries and territories across the continent. Prior to joining the Company, Mr. Cummings held several positions with The Pillsbury Company in the U.S. As vice president of Finance for Pillsbury International, he had financial responsibility for a growing $1.2 billion international branded food business with operating companies in 16 countries. Mr. Cummings is chairman of The Coca-Cola Africa Foundation and is on the Boards of the African-America Institute, Africare and Clarke Atlanta University. He has served on the Advisory Board of The African Presidential Archives & Research Center, The Corporate Council on Africa and The Center for Global Development's Commission on U.S. Policy toward Low-Income Poorly Performing States (LIPPS). He is also a member of the Executive Leadership Council. Mr. Cummings holds a B.S. degree in Finance and Economics from Northern Illinois University and an MBA in Finance from Atlanta University. Coke Facts and Figures:
y

In April 1985, the company proudly introduced new taste of coke the first change in the secret formula since the product was created in 1886.

The contour bottle for Coca-Cola with the shape now known around the world was developed in 1915 by the Root Glass Company.

The trade mark Coca-Cola was registered with the U.S. Patent and Trademark Office in 1893, and followed by Coke in 1945.

The unique contour bottle, familiar to consumers everywhere was granted registration as a trademark by the U.S. Patent and Trademark Office in 1977.

83

History in 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 CocaCola 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. Virtually all the goods and services required to produce and market CocaCola products locally including our Kinley water brand launched in 2000, Shock, an energy drink launched in 2001, and Sunfill, our first powdered concentrate, also launched in 2001 are made in India, ensuring that the benefits of such enterprises remain in the local communities in which they operate. For as long as weve been in India, The Coca-Cola Company and our 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. Around the World: Our Global Operations Although Coca-Cola was first created in the United States, it quickly became popular wherever it went. Our first international bottling plants opened in 1906 in Canada, Cuba and Panama, soon followed by many more. Today, we produce nearly 400 brands in over 200 countries. More than 70 percent of our income comes from outside the U.S., but the real reason we are a truly global company is that our products meet the varied taste preferences of consumers everywhere. Atul Singh :-President & CEO, Coca-Cola India:--------Atul Singh took over as the President & CEO, Coca-Cola India from 1st September 2005.Prior to this assignment, Atul Singh was the President of East, Central & South (ECS) China Division in January 2005. Given the strategic importance of China, a Division within the greater China Division was created. ECS China Division consists of Shanghai, the Swire Territories of China, Hong Kong and Taiwan. Additionally, Atul was also responsible for the global and strategic Key Customer Relationships
84

for Greater China and was a member of the Customer Leadership Council. Prior to his appointment as the President of East, Central and South China Division, Atul served as Deputy Division President and headed the Operations group of China Division. Under Atul's leadership, mainland China operations was among the fastest growing Coca-Cola businesses worldwide for the past 3 years. Atul started his career in the Coca-Cola system in 1998 as Vice President, Operations of Coca-Cola India Division. He led the Franchise Operations and Key Accounts group of the India Division from 1998 to 2001. Atul then joined the China Division in July of 2001 as Region Manager of East China, China Division. Under his leadership, East China Region exceeded volume and profit targets by growing at double the rate of other regions. Prior to joining Coca-Cola, Atul worked for the Colgate Palmolive Company for 10 years and held several roles including Country General Manager, Nigeria (1995-1998), CFO then General Manager, Romania (1992-1995) and Finance Manager, USA Body Care (1990-1992), Prior to Colgate, Atul worked as an Auditor with Price Waterhouse in New York. Atul, holds a MBA degree from Texas Christian University. Atul Singh elected as the Chairman of AMCHAM, India Atul Singh, President and CEO - Coca-Cola India was unanimously elected as the Chairman of the American Chamber of Commerce (AMCHAM) in India for the year 2008 - 09. The announcement was made at the 16th annual general meeting of AMCHAM India held in Delhi. Atul succeeds Kashinath Memani, former chairman Ernst & Young, India. Atul has been on the board of AMCHAM for the last two years where he played a key role in steering the committee on food processing sector. He also heads FICCI sports committee & CII - CSR committee under his able leadership. AMCHAM India is a full - fledged business chamber representing the interests of American companies operating in India. The Chamber has over 530 members. It has 5 chapters in Bangalore, Chennai, Hyderabad, Karnataka and Mumbai with headquarters in Delhi. Every person who drinks a Coca-Cola enjoys a moment of refreshment and shares an experience that millions of others have savored. All of those individual experiences combined have created a worldwide phenomenon a truly global brand. On the distribution front, 10-tonne trucks, open-bay three-wheelers that can navigate the narrow alleyways of Indian cities, ensure availability of the brands in every nook and corner of the country. The company-owned Bottling arm of

85

the Indian Operations, Hindustan Coca-Cola Beverages Private Limited is responsible for the manufacture, sale and distribution of beverages across the country. A Healthy Growth to the Indian Economy Ever Since, Coca-Cola India has made significant investments to build and continually consolidate its business in the country, including new production facilities, waste water treatment plants, distribution systems and marketing channels. Coca-Cola India is among the countrys top international investors, having invested more than US$ 1 billion in India within a decade of its presence and further pledged another US$ 100 million in 2003 for its operations. A Pure Commitment to the Indian Economy The Company has not only shacked up the Indian carbonated drinks market, and given consumers the pleasure of world-class drinks to fill up their hydration; refreshment & nutrition needs but has also been instrumental in giving an exponential growth to job opportunities.

Creating

Enormous

Job

Opportunities

With virtually all the goods and services required to produce and market Coca-Cola being made in India, the business system of the Company directly employs approximately 6,000 people, and indirectly creates employment for more than 125,000 people in related industries through our vast procurement, supply and distribution system. The vast Indian operations comprise 25 wholly-owned- companyowned bottling operations and another 24 franchisee-owned bottling operations. That apart, a network of 21 contract-packers also manufactures a range of products for the Company.

86

PRODUCT AND SERVICES Maaza and Kinley are Trademarks of The Coca-Cola Company. The business system of the Company in India directly employs approximately 6,000 people, and indirectly creates employment for many more in related industries through our vast procurement, supply and distribution system. The vast Indian operations comprise 25 company-owned bottling operations and 24 franchisee-owned bottling operations. That apart, a network of contract-packers also manufactures a range of products for the Company PARTICIPATIVE LEADERSHIP Right from our interactions in the market, our Business Planning and our Brand launches, to our Employee Engagement Programs, our Values Agenda, and employee processes, every system is available for continuous improvement. A learning atmosphere, enabled by our Manifesto for Growth, helps us seek and replicate the learnings from within and outside our organization. Our Engagement programs enable us to examine, validate and improve ourselves, constantly. Our colleagues involve themselves in our opportunities for participative leadership volunteering for work groups that assist decision-making in critical processes. Coca-Cola India tops Fifth Business Today-Cirrus Report of Indias Biggest Newsmakers - 2007 in the Food & Beverage Segment: Cirrus Report which annual tracks Indias Biggest News making Corporate, has just come out with its report for 2007. Coca-Cola India has emerged on top within the Food & Beverage Segment. Some of the other industry categories included in the study included Automobiles, Aviation, Banking, Telecom, Retail etc. As per the 2007 report, Coca-Cola Indias corporate Image scores have sharply risen by 103% (as compared to 2006). In the Quality of media exposure scores, Coca-Cola India has again shown a phenomenal increase in its share of positive press coverage. The Quality of positive media exposure score for the company has risen by 124% as compared to the last year. Another interesting point put forth by the annual study, shows Coca-Cola India taking a giant leap in its overall media exposure rankings across 200 companies in 2007 - from 55 to 44. These rankings are based on
87

performance across all the three key parameters - i.e. Media Visibility, Image and Quality of Exposure. The study is topped by corporate like Reliance Industries, Google and Tata Motors, each ranking No.1, 2 and 3 respectively. MISSION, VISION, AND VALUES The Coca-Cola Company Mission Our Mission is:
y y y

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

The Coca-Cola Company VisionTo achieve our Mission, we have developed a set of goals, which we will work with our bottlers to deliver: Profit: Maximising return to shareowners while being mindful of our overall responsibilities. People: Being a great place to work where people are inspired to be the best they can be. Portfolio: Bringing to the world a portfolio of beverage brands that anticipate and satisfy people's desires and needs. Partners: Nurturing a winning network of partners and building mutual loyalty. Planet: Being a responsible global citizen that makes a difference.

The Coca-Cola Company Values

Our shared values that we are guided by are:
y y y y y

Leadership Passion Integrity Accountability Collaboration

88

y y

Innovation Quality AWARDS AND ACHIEVEMENTS

Cola-Cola India wins the bhadigari award from the delhi government for its efforts in community development
y

The Company has already executed nearly 200 rain water harvesting structures across 17 states

Coca-Cola India has plans to undertake 40 new rain water harvesting projects during the current year

The company is also working with local communities in various states on projects like Paper & PET recycling, education and clean environment projects

Coca-Cola India won the 'Bhagidari award' on February 25, 2006,in New Delhi, for its contribution in water conservation & environment management programmes and for its contribution to community development, from the Delhi Government. This is the third year in a row that the company has won this award. Mr. Atul Singh, President & CEO, Coca-Cola India received the award from the Honble Chief Minister of Delhi, Ms. Sheila Dikshit on behalf of the company at a function during the Bhagidari Utsav at the Pragati Maidan in New Delhi. Coca-Cola India is supporting several rain water harvesting projects spread across 17 states with nearly 200 rain water harvesting structures. The company plans to take up another 40 such projects by the end of the year. Coca-Cola India, Kaladera unit has been recognized as a Water Efficient Unit across Industries at the National Award for Excellence in Water Management held at CII-Godrej GBC, Hyderabad on December 19 & 20, 2005.It has been adjudged as one of the 27 most water efficient units for its Water Management practices. Coca-Cola Golden Spoon Awards 2008 Shri Subodh Kant Sahai, Honble Minister of Food Processing industries, Government of India inaugurated the recently held Coca-Cola Golden Spoon Award 89

2008. The awards are given for excellence in food retailing in India. Yo! China bagged the The Coca-Cola Golden Spoon Awards - 2008 for the Most Admired Food & Beverages Retailer of the Year: Quick Service Restaurant (QSR) Indian Origin.

The other awards handed over during the evening included:

y

Cafe Coffee Day won the Award for the Most Admired F&B Retailer Of The Year: Cafes & Juice Bars

Mainland China won the Award for the Most Admired F&B Retailer Of The Year: Dine-In Indian Origin

Reliance Fresh won the Award for the Most Admired F&G Retailer Of The Year: Convenience / Express Formats Food Bazaar won the Award for the Most Admired F&G Retailer Of The Year: Supermarkets

Big Bazaar won the Award for the Most Admired F&G Retailer Of The Year: Hypermarkets

Hypercity won the Award for the Most Admired F&G Retailer Of The Year: Landmark Concept & Creation The Most Admired F&G Retailer Of The Year: Private Label award went to More

Future Group won the Award for the Most Admired Retailer Of The Year: Dynamic Growth In Network Expansion Across Food, Beverages & Grocery

Spinach won the Award for the Most Admired F&G Retailer Of The Year: Regional Player

Big Bazaar won the Award for the Most Admired F&G Retailer Of The Year: Consumers Choice

Gunendar Kapur, President and Chief Executive, Food Business, RIL, won the Award for the Most Admired Food Professional Of The Year: Food & Grocery Vikram Bakshi, MD, McDonalds (North & East India) and President, Restaurants Association of India, won the Award for the Most Admired Food

Professional Of The Year: F&B Services

90

PRODUCTS

The world's favourite drink. The world's most valuable brand. The most recognizable word across the world after OK. Coca-Cola has a truly remarkable heritage. From a humble beginning in 1886, it is now the flagship brand of the largest manufacturer, marketer and distributor of non-alcoholic beverages in the world. In India, Coca-Cola was the leading soft-drink till 1977 when govt. policies necessitated its departure. Coca-Cola made its return to the country in 1993 and made significant investments to ensure that the beverage is available to more and more people, even in the remote and inaccessible parts of the nation. Vikram Coca-Cola returned to India in 1993 and over the past ten years has captured the imagination of the nation, building strong associations with cricket, the thriving cinema industry, music etc. Coca-Cola has been very strongly associated with cricket, sponsoring the World Cup in 1996 and various other
91

tournaments, including the Coca-Cola Cup in Sharjah in the late nineties. Coke was available for just Rs. 5 across the country and this pricing initiative together with improved distribution ensured that all brands in the portfolio grew leaps and bounds. Coca-Cola had signed on various celebrities including movie stars such as Karishma Kapoor, cricketers such as Srinath, Sourav Ganguly, southern celebrities like Vijay in the past and today, its brand ambassadors are Aamir Khan and Hrithik Roshan. Coca-Cola 2LCoca-Cola with AamirCoca-Cola 2L Glass PET Can Fountain 500 ml, 1.5 L,

200 ml, 300 ml, 500 ml, 1000 ml 2 L, 2.25 L, 500 ml + 100 ml

330 ml Various Sizes

92

Strong Cola Taste, Exciting Personality Thums Up is a leading carbonated soft drink and most trusted brand in India. Originally introduced in 1977, Thums Up was acquired by The Coca-Cola Company in 1993. Thums Up is known for its strong, fizzy taste and its confident, mature and uniquely masculine attitude. This brand clearly seeks to separate the men from the boys.

Glass

PET

Can

Fountain

500 ml, 1.5 L, 200 ml, 300 ml, 500 2 L, 2.25 L, 330 ml ml, 1000 ml 500 ml + 100 ml

Various Siz

93

Water, a thirst quencher that refreshes, a life giving force that washes all the toxins away. A ritual purifier that cleanses, purifies, transforms. Water, the most basic need of life, the very sustenance of life, a celebration of life itself. The importance of water can never be understated. Particularly in a nation such as India where water governs the lives of the millions, be it as part of everyday rituals or as the monsoon which gives life tothesub-continent. Kinley water understands the importance and value of this life giving force. Kinley water thus promises water that is as pure as it is meant to be. Water you can trust to be truly safe and pure. Kinley water comes with the assurance of safety from the Coca-Cola Company. That is why we introduced Kinley with reverse-osmosis along with the latest technology to ensure the purity of our product. That's why we go through rigorous testing procedures at each and every location where Kinley is produced.

94

Minute Maid - A 62 year success story. The history of the Minute Maid brand goes as far back as 1945 when the Florida Foods Corporation developed orange juice powder. The company developed a process that eliminated 80 percent of the water in orange juice, forming a frozen concentrate that when reconstituted created 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.

Minute Maid- One of the world's largest juice and juice drink brands Over the years, through innovations and unmatched consumer experience provided in over 60 countries, Minute Maid brand has clearly become one of the world's largest juice and juice drink brands. The launch of Minute Maid Pulpy Orange in India (starting with the south of the country) is aimed to further extend the leadership of Coca-Cola in India in the juice drink category.Available in two pet sizes of 400 ml and 1000ml , 1.25 lt.

95

The COCA-COLA Co. gloves to meet the changing desires of the consumers and ever evolving family all the products that includes the following powerful brands: COCA-COLA: The best selling soft drink in me world, COCA-COLA is the most recognized and admired trademark around the globe. In April 1985, after extensive taste" testing, the company introduced a new taste for COCA-COLA in United States and Canada. Consumers responded with an unprecended- and now legendaryoutpouring of loyalty and affection for 7the original formula, and the company listened. In July 1985, the Company reintroduced the original formula for COCACOLA as "COCA-COLA Classic". FANTA: Introduced in the United States in 1960, Fanta was the first soft drink other man COCA-COLA to be marketed by the company. For years, the Fanta line was distributed only by the European bottlers of COCA-COLA. COCA-COLA G.M.B.H., the German ana of The COCA-COLA export corporation, developed the original orange- flavored Panta during we World War II, when the- machinery-, materials -and the concentrate necessary to produce COCA-COLA was unavailable. Today, Fanta is the forth best selling brand worldwide. DIET COKE:- A milestone in innovative product development, diet Coke debuted in the United States in 1982, and began a massive international rollout in 1983-as "COCA-COLA light" in some markets. Named as the "Brand of the Decade" in 1990, Diet Coke remains the number one Diet soft drink in the United States and around the world. SPRITE: Introduced in the United States in 1961, Sprite is now the fifth best selling soft drink in the world and fourth best selling in the COCA-COLA family. Now the Company is actively launching Sprite in India. Sprite was launched in Chandigarh on 9th August, 1999.

96

SOME BRANDS OF COCA-COLA COMPANY AVAILABLE ABROAD

POWERADE: - Introduced in 1990 as a fountain beverage and in 1993 as a packaged drink, the Company's first sports drink is now available in a variety of flavours. CHERRY-COKE: - The pioneer in its category. Cherry Coke debuted nationally in July 1985 and achieved top-10 status among all U.S. soft drinks by the year end. Some other COCA-COLA Company brands also available in the United States are TAB, MIELLO YIELLO, FRESCA, BARQ'S, FRUITOPIA and MR. PIBB The company also offers diet and caffeine free formulations of many of its soft drinks,diet Sprite, diet Cherry Coke, caffeine free COCA-COLA classic and caffeine free Diet Coke. Company also offers brands tailored to meet tide needs of other national markets, such as highly popular Georgia Coffee line in Japan.

ADVERTISING AND MARKETING The Company has succeeded over the years in creating advertising images that are as special as the products they are designed to promote. As a result, according to the global survey conducted by Landor Corporation, the COCA-COLA trademark is the most admired and best-known trademark in the world. Over the years, advertising for COCA-COLA has changed with the time, but it has always reminded consumers of the refreshment and the simple moments of pleasure they have come to associate with their favorite cold drink

97

INTRODUCTION OF SOFT DRINKS IN JAMSHEDPUR

Later Charan Singh is credited with initiative to set up Soft drink industry in the city. He was a resident of Phagwara, Punjab and he used to sell soft drink in carts. Domestic tensions forced him to march to Jamshedpur 50 years ago to seek a living for him. Then he set up his own machine and started bottling without any brand name. Today his son Mr. Sunder Gurudev is carrying out the legacy, which his father had left behind. This plan operates only 3 months (summer). Even today Jamshedpur remembers the great exponent THANDAWALA. The credit of establishing Jamshedpur in the soft drink map goes to late Dharamchand Narbheram Kamani. During the course of his business trips he was struck with the idea of setting up of a soft drink industry in Bihar. June 1967 was significant for soft drink industry in Jamshedpur.

HISTORY OF THE STEEL CITY BEVERAGES PVT.LTD.

S.M.V. Beverages Ltd. Adityapur, Jamshedpur a medium sector enterprise located amidst beautiful surrounding on the Tata-Kandra road in the Adityapur industrial area and producing Pepsi range of bottled soft drinks viz. Pepsi, 7up, Mirinda and Slice and had now become a household name in Jharkhand today symbolizes achievement and advancement over the years. Today, it symbolizes self-reliance in quality and technology, productivity and industrial relations since its inception more than 25 years ago. S.C.B.L. was established in 1967 and production commenced in March 1969. At the very outset the company installed state of the art machines and technology, for the production and bottling of soft drinks. The bottling plant with a capacity to produce 220 bottles per minute is totally automatic and also has a modern state of the art inter mix machine for bringing forth the right blend of flavors. The company continues to adapt innovative technology in keeping with its policy of constant quality improvements. With the advent of Pepsi cola internationals in India, the company entered into an agreement with Pepsi foods ltd. for the production and sales of Pepsi range of soft drinks in Jharkhand and Bihar. The company which has a manpower of
98

110 ranked as the best bottling company in the country in terms of quality, efficiency, sales, productivity and HRD. Under the guidance of its chairperson Smt. Kusum Kamani and the able stewardship of its Managing Director Sri. Nakul Kamani, the company has consistently backed on numerous occasions awards for quality assurance and productivity. In 1993, it bagged top honors for being the best quality conscious plant among all Pepsi bottling companies in India. The companys highly sophisticated plant and quality control laboratory along with the dedication and enterprises of its employees is more than evenly matched by the managements sense of understanding and compassion that had ensured the companys progress with every passing day. S.C.B.L.was taken over by Mr. S.K. Jaipuria in March 1999 from Mr. Nakul Kamani along with Rishabh Marketing (P) Ltd., the marketing unit. Mr. S.K. Jaipuria is very much enthusiastic and enterprising businessman. He has a number of bottling plants all over India, like Orissa, Bhopal, Nagpur, Hyderabad, Dharward etc. In 2002 he setup another bottling plant in the name of SMV Beverages (Jamshedpur), a unit of SMV Agencies (P) ltd. It has a capacity of 600 BPM which is catering to the whole of Jharkhand. It is also a franchisee of Pepsi. JAIPURIA GROUP Jaipuria Group has the distinct honor of being the biggest bottler in India of the global giant Pepsi Co. it controls near about 60% of Pepsi bottling business in India. The group has been managing a network of sources of distributors and simultaneously proving employment to thousands of people. With state-of-the-art technology and plants equipped with the latest machinery, the Jaipuria Group has occupied a remarkable position in the soft drink industry of India. The company has created a strong hold across the entire nation. SMV Beverages Jamshedpur is proud of winning PEPSI Q.A (Gold) International Quality Award for the year 2001. SMV Beverages is also proud of settling PET plant in March 2003. It has the capacity of bottling 40 PET bottles per minute. It is bottling 500ml, 1.5 litre, and 2 litre PET bottles of different flavors. 1. 2. 3. 4. 5. PEPSI MIRINDA LEMON MIRINDA ORANGE. 7UP MOUNTAIN DEW.

99

Earlier it was KAMANI FOODS which was only bottling Slice and in 2004 KAMANI FOODS was merged with SCBPL and now SCBPL is producing SLICE along with other brands of Pepsi. It is mainly bottling 200ml and 250ml SLICE. SCBPL was producing different brands of Pepsi i.e. PEPSI, MIRINDA ORANGE, MIRINDA LEMON, SODA OF 300ml after merger of KAMANI FOODS it started producing SLICE of 250ml. recently SBCL has setup a PET plant for bottling in SLICE in PET bottles of 500ml and 1.2 litres. Stock keeping units SLICE Glass 200ml Glass 250ml PET 500ml PET 1.2 litre 7UP Glass 200ml Glass 300ml Can 250ml Can 330ml 1.2litre PET 600ml PET 1.5litre PET 2 litre MIRINDA Glass 200ml Glass 300ml Can 330ml PET 600ml PET 1.5litre PET 2litre PEPSI Glass 200ml Glass 300ml Can 250ml Can 330ml PET 600 ml PET 1.5 litre PET 2 litre TROPICANA TWISTER ORANGE PET

100

CHRONOLOGY OF ACHIEVEMENT
First plant to achieve 100% result on Pepsi norm (Japan) and got an Award. Ist plant to pack large packs---500ML. Commissioning of Kamani Foods- 1988 Started Operating for Bottling Pepsi Products as a Franchise Operation (FOBO) Under Kusum Kamani-1990 First Plant to Achieve 100% Result on Pepsi Norm and got an Award-Excellence in Quality award-1992 IQA Bronze Cash Award -1993 IQA Bronze Cash Award -1994 In 2001 received IQA Gold status. In 2002 received IQA Bronze Award In 2003 new pet Plant capacity of 60 BPM commissioned. In 2004 received IQA silver Award. Achieve Best Plant Team in 2004 VISION:Description of something (an organization corporate culture, a business, technology, an activity) in the future kotler. S.M.V. Beverages Pvt. Ltd. Says its Vision S.M.V. Beverages Pvt. Ltd enters the next few years with the confidence of a learning knowledge based and happy organization. We will establish our selves as a supplier of choice by delighting our customers with our service and our products. In the coming decade, we will become the most cost competitive Beverages Plant and so serve the community and the nation. MISSION:Essential purpose of the organization, concerning particularly why it is in existence, the nature of the business it in, and the customers it seeks to serve and satisfy Thomson -Philip

101

S.M.V. Beverages Pvt. Ltd. derive their mission statements from a particular set of tasks. They are called upon to perform in the light of their individual, national or global priorities.

MISSION STATEMENT OF S.M.V. BEVERAGES: Consistent with the Mission and values of the founder, Late D.N.Kamani. S.M.V. Beverages Pvt. Ltd. Strives to strengthen Indias industrial base through the effective utilization of men and materials. The means envisaged to achieve this are high technology and productivity, consistent with modern management practices. S.M.V. Beverages recognizes that while honesty and integrity are the essential ingredients of a strong and stable enterprise, profitability provides the main spark for economics activity. Overall, the company seeks to scale the heights of excellence in all that it does in all atmospheres free from fear and thereby reaffirms the faith in democratic values. PHILOSOPHY:The Philosophy of S.M.V. Beverages Pvt. Ltd. Establishes the value, believes & guidelines for the manner in which the S.M.V. Beverages Pvt. Ltd. Is going to conduct its business. Usually the officers of the S.M.V. Beverages Pvt. Ltd. Lay down the corporate Philosophy, which an organization follows in its strategic and operational activities. Such a Philosophy may not be consciously and formally stated but may gradually evolve due to the officers actions. Generally an officer has a perception of the type of organization that he wants his company to be the executive committees of S.M.V. Beverages Pvt. Ltd. Discuss and decide on a corporate philosophy to be followed for strategic management. Consultants may also be called upon to make an in depth analysis of the organization to suggest an appropriate Philosophy statement. GOAL SETTING:Goals denote what an organization hopes to accomplish in a future period of time. They represent a future state or an outcome of the effort put in now. A broad category of financial and non-financial issues is addressed by the goals that a firm sets for it. P.S. Kumar, Director of S.M.V. Beverages Pvt. Ltd. expressed the purpose of his organization as our goal is to be the most competitive and progressive institution in our (i.e., Beverages) industry. The company stated goals were growth,

102

innovativeness, high profits as a barometer of efficiency highly involved employees distinctively charged with pride The main goals of S.M.V. Beverages Pvt. Ltd. is as follows: Growth had been achieved in terms of customers & average business per employee, Good product quality & service. Innovativeness was reflected in a number of new schemes. A high Profit between its competitors and become industry leader. Employee involvement had been sought through the delegation of authority and devolution of power to grassroots levels through a change in administrative structure and the creation of circle. STRUCTURE OF THE ORGANIZATION:For the every concern a structure is necessary on which the complete organization should be founded. The existence of a structure as obvious in every organization whether planed/unplanned or ill planed. To have a structure is not a choice of the organizer. The choice is only of the form and pattern of the organization. Plan ed organization structure may be proved logical clear- cut and streamlined in order to meet the present requirement. Otherwise it will merely be a makeshift arrangement and the management is rendered difficult and ineffective because organizational structure affects everyone in the organization. A good organizational structure facilitates managements management and the operation of enterprise and it encourages growth. It helps organization to reach its common goal. In order to make the organizational structure more effective one structure that can meet the demand of various factors namely environment, technology, size and people. S.M.V. Beverages was taken over by Mr. S.K.Jaipuria in March1999 from Mr.D.N.Kamani along with Rushab Marketing Limited, a marketing unit. M/s S.K.Jaipuria running this plant very successfully. He is very much enthusiastic to increase the production and sales and to capture the Whole marker of South Bihar, now Jharkhand State. He established another plant in the name SMV Beverages, Jamshedpur and increased production from this new plant is 600 bottles per minute. S.M.V. Beverages Jamshedpur has a management boars headed by Mr.S.K.Jaipuria. He holds the top position but the overall policies regarding managerial decision and all the executive function are performed and look after by the Director Mr.P.S.Kumar .He has been given the power
103

and authority to manage the company affairs. Therefore, Mr. P. S. Kumar can be recognized as the Chief Executive. The Director look after all the functional department like production, sales, accounts, personnel, purchase etc. Every departments sends report directly to the director and are responsible to him in sense of working . Inspite of this all department are in direct control of the director. Plant superintendent is the head of the production department. He look after production, that is bottling process, inspection, storage of new materials and though there is a quality control manager. The controller of accounts heads the accounts department. Manager (Personal & Administration) looks after the function of administration, industrial relation, legal jogs security, welfare etc. The purchase officer In charge of all purchase activities of concern. S.M.V. Beverages, Jamshedpur is proud of winning Pepsi I.Q.A (Gold), International Quality Award, Gold for the year 2001. S.M.V. Beverages also setup a PET bottle plant in March 2003. it has a capacity of bottling 40 PET bottles per minute. It is bottling 500ml, 1.5 lt., 2 lt. PET bottles of different flavors namely Pepsi, Mirinda, 7up, Mountain dew, Slice. At present SMV Beverages (Jamshedpur) (a unit of SMV Agencies (P) Ltd.) have following Sister Concerns. Steel City Beverages Pvt. Ltd Hyderabad Marketing Company Earlier it had M/s Kamani Food which was only bottling SLICE and in 2004. M/s Kamani Food was merged with SCBPL now SCBPL is producing SLICE along with other brands of PEPSI. It is mainly bottling 300ml and 250ml,1.2 lr (Slice) Core Capabilities Product Leadership: Refers to the ability t o develop creative, premium products t hrough specialized new t echnologies Market Leadership: Refers to the ability to achieve the "PEPSI brand is No. 1" goal backed by its for midable market pres ence worldwide.

104

People Leadership: Refers to talented people who perfor m excellently by int ernalizing and practicing innovations. Corporate Culture: Though a company implements perfect management strategies and boasts of outstanding and talented people, it should have an appropriat e corporat e cultur e to unleas h the power of thes e capabilities. No 'No'- Challenge: We foster a corporate culture wher eby we suggest an alt er native before saying "no" and aggres sively work towards fulfilling our goal. 'We' not 'I':We pursue a corporate culture wher eby we embrace a strong teamwork. Fun to work: We cr eate a workplace where individuals' cr eativity and freedom are respect ed and working is made fun. FOLLOWING ARE THE MAJOR CONSIDERATIONS Clear lines of authority Adequate delegation of authority Minimum managerial level Unity of directors Application of ultimate responsibility Span of control Simplicity Flexibility Proper emphasis on shift activities.

105

THE PRODUCT PROFILE &PRODUCTION PROCESS

PRODUCT PROFILE The products manufactured and supplied by SMV Beverages Pvt. Ltd, are very limited in range as it is not independent to diversify its products when required. This is because it is a unit of PEPSI FOODS LIMITED, which supplies the concentrates for different brands of soft drink. These are:PEPSI (cola flavour) 7 UP (Clean lemon flavour) MIRINDA (orange) MOUNTAIN DEW SLICE(mango flavour ,having concentration of ALPHANSO & TOTAPURI Mango 30:70 ) The chief consumers are young masses. Beside direct consumer, hoteliers, restaurants owners and various other soft drinks peddlers also use them. Thus it can be said that these are the product for mass consumption.

106

CARBONATED SOFT DRINKS:COLA:

Pepsi REFRESH EVERYTHING Contains: Carbonated water, high fructose corn syrup, caramel color,phosphoric acid, caffeine, citric acid and natural flavor

Calories Total Fat (g) Sodium (mg) Potassium (mg)

100 0 25 10

Total Carbohydrates (g) 27 Sugars (g) Protein (g) Caffeine (mg) 27 0 25

Diet Peps 0 carbs. 0 calorie. Its the diet cola. Contains: Carbonated water, caramel color, aspartame, phosphoric acid, potassium benzoate (preserves freshness), caffeine, citric acid and natural flavors.

107

Calories Total Fats (g) Sodium (mg) Potassium (mg)

0 0 25 20

Total Carbohydrates (g) 0 Sugars (g) Protein (g) Caffeine (mg) 0 0 24

ORANGE:-

Mirinda Orange SPARK YOUR IMAGINATION Contains: Carbonated water, high fructose corn syrup, citric acid, purity gum, potassium benzoate and potassium sorbate (preserves freshness), ester gum, natural flavor, yellow 6, ascorbic acid and calcium disodium EDTA (to protect flavor), sodium citrate. Calories Total Fats (g) Sodium (mg) 120 0 25

108

Total Carbohydrates (g) 33 Sugars (g) Protein (g) Caffeine (mg) 32 0 0

Mountain Dew DARR KE AAGE JEET HAI The fastest-growing soft drink of the decade, Mountain Dew currently ranks as the nation's leading soft drink in retail outlets. Doing the "Dew" is like no other soft drink experience because of its daring, high-energy, high-intensity, active, extreme citrus taste. Contains: Carbonated water, high fructose corn syrup, concentrated orange juice and other natural flavors, citric acid, sodium benzoate (preserves freshness), caffeine, sodium citrate, gum arabic, yellow 5, erythorbic acid (preserves freshness), calcium disodium EDTA (to protect flavor) and brominated vegetable oil. Calories Total Fats (g) Sodium (mg) Potassium (mg) 110 0 50 0

Total Carbohydrates (g) 31

109

Sugars (g) Protein (g) Caffeine (mg)

31 0 36

LEMON:

7up Cool 7up Contains: Carbonated water, caramel color, aspartame, phosphoric acid, potassium benzoate (preserves freshness), caffeine, citric acid and natural flavors

Calories Total Fats (g) Sodium (mg) Potassium (mg)

100 0 25 20

Total Carbohydrates (g) 25 Sugars (g) Protein (g) Caffeine (mg) 31 0 24

110

Nimbu paani NimboozPepsiCo India has launched packaged nimbu paani, Nimbooz by 7UP. The product has been created to suit Indian tastes. PepsiCo claims that Nimbooz, an offering with real lemon juice, no fizz, and no artificial flavours will be available in trendy, convenient packs very soon in Jamshedpur . FRUIT JUICE:-

Slice Mango Aamasutra Contains: Carbonated Water, High Fructose Corn Syrup, Mango Juice From Concentrate, Citric Acid, Potassium Benzoate (Preserves Freshness), Modified Food Starch, Natural & Artificial Flavors, Potassium Sorbate (Preserves Freshness), Ascorbic Acid (Vitamin C),Yellow 6, Glycerol Ester of Wood Rosin, Calcium Disodium EDTA (To Protect Flavor), Sodium Citrate. Calories Total Fats (g) Sodium (mg) Potassium (mg) 120 0 25 35

Total Carbohydrates (g) 35 Sugars (g) 35

111

Protein (g) Caffeine (mg)

0 0

PACKAGED DRINKING WATER

Aquafina Pure Water. Perfect Taste. Enjoy the crisp, refreshing taste of Aquafina 100% pure, non-carbonated, purified drinking water. The consistent purity and great taste of Aquafina are guaranteed by means of a state-of-the-art purification process that includes reverse osmosis and carbon filtration. Since its debut in 1995, Aquafina has won over consumers with its great taste and purity. Aquafina is the official bottled water of Major League Soccer and the PGA of America. Aquafina is distributed nationwide and can be enjoyed in 500 ml., 1-liter and 1.5-liter bottles. Aquafina. Purity Guaranteed. Contains: Purified water Calories Total Fats (g) Sodium (mg) Potassium (mg) Total Carbohydrates (g) Sugars (g) 0 0 0 0 0 0

112

Protein (g) Caffeine (mg)

0 0

SU
G SK C G P C P

SKUs OF MIRINDA
Glass 200ml , 300ml Can P t 250ml, 330ml 600ml, 2 ltr

P t 500ml

113

SKUs OF DIET PEPSI

CAN 250ml, 330ml

SKUs OF SLICE
Glass 250ml P t 500ml, 1.2 ltr Tetra 200ml

SKUs OF AQUAFINA
PET 500ml, 1 ltr, 2 ltr

SKUs OF TWISTER
PET 350 ml, 1.2 ltr

SKUs OF TROPICANA
TETRA PACK 200ml (pineapple , mixed fruit, mango nectar, guava nectar, Lychee, Peach orange nectar, Strawberry, Apricot) TETRA PACKS 1 LTR ( pineapple , mixed fruit, mango nectar, tomato, guava

114

SKUs OF NIMBOOZ
Glass 200ml Pet 350ml Tetra pack 200ml

T E PRODUCT ON PROCE
The production process being carried on the SMV Beverages (Jamshedpur) in for batch type. The entire process is almost automatic and it requires huge amount of water and electricity. The production process is divided into following steps Water treatment Bottle washing Syrup preparation Filling Shipping WATER TREAT ENT SMV Beverages (Jamshedpur) gets water from Sitarampur Dam. This wa being ger collected in huge tanks undergoes two different treatments resulting in soft water and treated water. OFT WATER The municipal l water is passed through sand filter, carbon purified and salt charged softener (to remove hardness). The water obtained after this treatment is called soft water. This soft water being kept with 2-4 PPM c12 in storage tank is used for bottle washing and the water being stored with c12 goes the boiler.

115

TREATED WATER The municipal water is at first treated with Ferrous Sulphate (feSO4) lime and Chlorine. This process involved is called Coagulation and it takes place in the reaction tank. From reaction tank the water moves on to the intermediate tank to be stored in storage tank. From there it passes through the sand filter, carbon purifier, and Ultra-Violet Light. Water obtained after this much treatment is called treated water and is used preparation of drinks. BOTTLE WASHING Bottles coming back from market need to be washed before filling. Washing of bottles is a completely automatic process. This takes place in machine having three chamber. Bottles are put on the conveyor and as they enter the machine they undergo three successive treatments. At first, they are treated with 4% caustic soda at 100-150 F. in the next chamber, they are treated with 2% caustic soda at 120 F and in the third chamber they are treated with soft water. The cleaned bottled are sent to inspection, where the upper and lower portions of the bottle are watching successively against light.

Bottle washing SYRUP PREPARATION The room is well equipped with several tanks and filter press. The Syrup is prepared with calculated amount of sugar and water being heated up to 85 C. This syrup is passed through filter press. Thfiltered syrup is passed through a Para flow cooler whereby recycling and glycol method the syrup is cooled down to 20-25C. The cooled syrup is stored in syrup tank.

116

FILLING The syrup mixed with carbonated water under pressure in a Traumatic Machine. Inspected bottles gradually come under the Filler machine where the carbonated syrup is poured into the bottles and the crowner machine helps in closing the bottles completely airtight. Ready bottle are once again inspected to check the quantity and from there they are collected.

SHIPPING After the whole process of bottling is completed, filled bottles in cases (creates) are sent to the shipping department and it sends them to different destinations for Sales.

117

PLANT VISIT

118

MARKETING ACTIVITIES OF SMV BEVERAGES

119

MARKETING ACTIVITIES Marketing is a social process by which individual and group obtain what then need and want through creating offering and freely exchanging products and services of values with others. -Philips Kotler The tools of marketing mix are combined in such a manner that they give maximum mileage to the product from the factory to the consumers hand. Product Price Place Promotion Position Probing Perpetual Mapping The soft drink being a FMCG has a wider and scattered market. Thus to enable concentrate effort of marketing activities in different scattered market, for effectively setting the entire market is broken down in the following segments:Route Market Home Market At work Market ROUTE MARKET Outlet in this market caters to those people who are engaged in shopping eating, outgoing to and from in amusement centres etc. HOME MARKET Outlet in this market caters to people buying predominantly for homeconsumption either by case or loose bottles. AT WORK MARKET Outlet in this market to people working in offices, factories etc an attempt in always made to make soft drinks readily available all day long while people are actively working

120

PROMOTIONAL ACTIVITIES
Sales promotion a key ingredient in marketing campai ns consists of a collection of g incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by customers.

Advertising

Personal Selling

Sales Promotion

Direct Marketing

Public Relation

Promotional activities play a key role in the entire mar keting effort being carried outby S.M.V. Beverages which are in sync with those of PepsiCo India. These promotional activities generate more sales as well as create a good image of the product in the mind of the customer. The promotional tools used by SMV Beverages for its marketing activities are y y y y y Point of sale display Incentives to retailers Sales promotion through sponsoring special events Sales promotion through various schemes Advertising communicate with

consumers at the point of sale. In-store advertising includes shopping carts, cart straps, aisles and shelves. he appeal of the point of sale advertising lies in the fact that in many categories consumers make the bulk of their final decision regarding purchase in the shop.- Marketing management. Kotler, 12e
121

POINT OF SALE DISPLAY-: here are many ways t

This is particularly true for those brands which have very low customer loyalty. Soft drink is one such product in which most of the time buying decision is made at the spur of the moment based on the brand which is readily available and catches the eye of the customer. For this reason S.M.V. Beverages invest heavily in this category by supplying the shop owners with stands so that they can keep the bottles outside on those stands so that customers have an eye contact with them as he/she is entering the shop. Also Pepsi supplies the shop with visi coolers with a glass front so that cooled bottles can be seen by the customer when he/she is making a decision on the flavor that the person is going to buy. Apart from these SMV Beverages takes keen interest in other type of strategies like painting the walls of the shops with the Pepsi logo, putting up glow signs and dash boards with the Pepsi logo and the shop name. This increases the visibility of the brand among the customer when he/she enters the shop. INCENTIVE TO RETAILERS Another method of sales promotion being used by SMV Beverages is by running special incentive schemes for retailers. This type of promotional strategy is conducted mainly during the peak season i.e., from March to July. In this the company with the help of its distributor in the respective areas categorizes the retailers into different categories based on sales. After this the retailers are given a target regarding the minimum number of crates that they have to sale in that period. On achieving the target the dealer is given the prizes which ranges from free bottles, gift items etc. SPONSORING SPECIAL EVENT Another promotional strategy which is very heavily used by Pepsi and as such by SMV Beverages is sponsoring various events which include cricket matches, local events like quiz competitions, parties, local sports events etc. While sponsoring international cricket matches require huge investments the decision regarding the same is taken by the parent company and SMV only acts as an intermediary to it. Sponsorship decisions which are taken by SMV are more localized in nature which includes local sport events, parties, music shows etc which require relatively smaller investments. This type of promotional activities helps in creating a positive image of the company and the brand. By becoming part of a special and more personally relevant moment in consumers lives, involvement with events can broaden and deepen the relationship of a company with the target market.
122

SALES PROMOTION THROUGH VARIOUS SCHEMES SMV Beverages keeps on running various schemes from time to time which are mostly those promoted by Pepsi and some by SMV Beverages. These include schemes for both the retailers as well as the consumers. Schemes which are given to the retailers include free bottles for every crate purchased; discount schemes under which discounts mostly monetary in nature are given to the retailers, scratch card scheme which include monetary gains as well as gifts are given to the retailers on buying stocks in bulk quantities. In the consumer activities there was a small game related to cricket. The local people had to hit the single stump twice in 3 chances. Who ever wins they were presented a Pepsi T-shirt. The marketing strategy

applied here was to buy a pepsi 200ml from the nearest outlet of pepsi to be eligible to play the game.The consumer activities took place in Sakchi(abhisekh jublee fresh), Golpahadi, Kadma(Ramkini mandir), Sundernagar,Karandih chowk,G.town club,Bhalubasa ,Baridhi, Telco, Sidhgorah, Adityapur,

Golmuri,Refugee colony, Dathkidi.

123

CONSUMER

ACTIVITIES LUCKY DRAW FOR THE RETAILERS

T SHIRT WON BY A PERSON

124

125

PROMOT ON BY UTC (under the crowns) BY PEPSI There were another one such promotional schemes given by Pepsi in UTC. In the 7up 200ml crowns there was a consumer scheme. In our training period all the students were divided into groups and there were given a particular area to do the advertisements for 7up 200ml. For that we had to put the stickers and bunting on the outlets of Sakchi. There was a consumer offer in 7up 200ml crowns. In those crowns there was a chance to win a nimbus or the chance to win some a cash prize under the crown. These type of activities is done to increase the sales of 7up. Primary focus is on Branding and secondary focus is on sales. It gives the mileage to the product. The motto behind it is to create a position in consumers mind to buy the product. The posters, stickers and bunting were put in the outlets by looking into the factor that there is the maximum visibility.

126

Distribution channels of SMV BEVERAGES in Jamshedpur region.

127

INTRODUCTION TO DISTRIBUTION CHANNEL THE RETAIL DISTRIBUTION CHANNEL In addition to a supply chain, manufacturers and retailers participate in another giveand-take relationship known as a distribution channel or marketing channel. A distribution channel is similar to, but different than, a supply chain. The distribution channel is where the deals are made to buy and sell products. Sales, negotiations, and ordering are done by these companies, or departments within companies. Then the supply chain kicks in, to do the physical work of manufacturing, transporting, and storing the goods; and facilitating the sales with services like consumer research, extending credit, and providing other services related to making the products attractive to customers and encouraging their ultimate sale. PARTICIPANTS IN DISTRIBUTION CHANNEL RETAILERS- The characteristic that sets a retailer apart from other members of its distribution channel is that the retailer is the party who ultimately sells the product to its end user or consumer. Retailers may be grouped according to any of the following four categories: Ownership. Every brick-and-mortar retailer can be classified as a large, national chain store; a smaller, regional chain store; an independent retailer; or a franchisee. Pricing philosophy. Stores are generally either discounters or full-price retailers. Within the discounter category, there are several subcategories such as factory outlets, consignment stores, dollar stores, specialty discount stores, warehouse membership clubs, and so on. Product assortment. The breadth and depth of product lines carried by the store depends a lot on its ownership. An Ann Taylor store, for example, sells Ann Taylor branded clothingnot much breadth of product line there, but extensive depth in that line. A Kmart, on the other hand, carries thousands of brands, but perhaps does not have much depth (not many brands) in any given category of product. Service level. The more exclusive or specialized the store, the more types of services it will generally offerfrom a name-branded credit card, to on-site alterations, to liberal return policies for its loyal customers. With the big box discounters, on the other hand, customers pay for convenience and bypass traditional service, by bagging their own groceries and the like. WHOLESALERS- Wholesalers are intermediaries or middlemen who buy products from manufacturers and resell them to the retailers. They take the same types of financial risks as retailers, since they purchase the products (thereby taking legal responsibility for them), keep them in inventory until they are resold to retailers, and may arrange for shipment to those retailers. Wholesalers can gather product from around a country or region, or can buy foreign product lines by becoming importers. The term wholesale is often used to describe discount retailers (as in wholesale clubs), but discounters are retailers, not technically wholesalers. And in B2B channels, wholesalers may be called distributors. AGENTS & BROKERS- Agents (sometimes called brokers) are also intermediaries who work between suppliers and retailers (or in B2B channels), but their agreements are different, in that they do not take ownership of the products they sell. They are
128

independent sales representatives who typically work on commission based on sales volume, and they can sell to wholesalers as well as retailers. In B2B arrangements, this means they sell to distributors and end users. Resident sales agents are good examples in retail. They reside in the country to which they sell products, but the products come from a variety of foreign manufacturers. The resident sales agent represents those manufacturers, who pay the agent on commission. A resident sales agent does not always have merchandise warehoused and ready to sell, but he or she does have product samples for which orders can be placed and is responsible for bringing the items through the importation process. Retailers that dont have the money, time, or manpower to send someone overseas for manufacturers site visits to check out the new product lines can depend on a resident sales agent to do the job. Buying offices can also be considered a type of agent or broker, since they earn their money pairing up retailers with product lines from various manufacturers. THE NEED FOR DISTRIBUTION CHANNEL Why are all these layers needed in distribution? Why cant a producer simply sell to a retailer, who sells to a consumer? Its a fair question, and in some cases, that is exactly how it happens. But the fact is that many producers are either too small or too large to handle all the necessary functions themselves to get their products to market. Consider the small, specialty manufacturer who is terrific at making fine leather handbags but may not have the expertise to market its products as well as it makes them, or they may not have the money to hire a team of full-time salespeople to court the customers and secure the orders. An intermediary who works for several small, noncompeting firms can easily handle those functions cost-effectively. An intermediary who specializes in importing and exporting can handle the intricacies of customs paperwork, overseas shipping, and foreign markets, too. Conversely, large companies need intermediaries because they are also in the business of manufacturing, not marketing. Turning out tens of thousands of cases of soft drinks, for instance, do you think Pepsi has time to take and fill individual orders from households? Channel members like wholesalers and retailers are useful because they are best at specific aspects of sales in their markets, leaving the manufacturers to do what they do bestwhich is turn out the best possible product. Having a distribution channel breaks the whole buying and selling process and all its related negotiations into manageable tasks, each performed by companies that specialize in certain skills. Using an import wholesaler, for example, can be handy because they know the laws and customs of the suppliers nations; and they generally offer their own lines of credit so the retailer wont have to deal with currency exchange or negotiate payment terms with a bank in another country. Another advantage of the distribution channel is its ability to even out the natural ebbs and flows of a supply chain. This comes from the ability of some channel members to store excess goods until they are needed, and to stockpile goods in anticipation of seasonal sales peaks. Depending on how close their relationships, channel members may also work together to purchase goods or services in greater quantity at discounts, passing the savings on to customers. Even for consumers, the distribution chain is handybeyond handy, in fact! It has become a necessity in our society. What if there were no supermarkets, for instance? Can you imagine how much more time and money you would spend having to buy every item at its source? How practical would
129

it be to run out to the nearest farm to pick up a quart of milk and some salad ingredients on your way home from work? TYPES OF CHANNELS DIRECT CHANNELThis is when the same company that manufactures a product sells it directly to the consumer or end user. Dell is a direct channel marketer. Mail-order catalog sales companies, like Lands End, are also direct channel sellers . RETAILER CHANNELThis is when the producer sells to the retailer, and the retailer sells to the consumer. WHOLESALER CHANNELIntermediaries play a role here, as the manufacturer sells to a wholesaler who sells to a retailer . . . who sells to the consumer. AGENT OR BROKER CHANNELThe most complex arrangement involves several transactions, often because the merchandise is being imported. The producer sells to an agent . . . who sells to a wholesaler . . . who sells to a retailer . . . who finally sells to the consumer or end user. DUAL CHANNEL OR MULTIPLE CHANNELThis term refers to the use of two or more channels to sell products to different types of customers. A lawnmower manufacturer, for example, might sell some product lines at retail and others to commercial lawn care companies, each requiring different intermediary services. HOW CHANNELS ARE CHOSEN Although retailers drive distribution channels, it is not usually the retailer who makes the decision to utilize one channel over the others. The producer of the product makes this decision. There are several characteristics of product lines that makes them more or less appropriate for a particular type of channel. Briefly, these characteristics can be summarized as follows: The products themselves- If a product is perishable, like many grocery items, it requires the shortest, most direct distribution channelwhich means the fewest possible intermediaries along the way. If a product is customized, like an expensive assembled-to-order computer system, it also benefits from a short distribution channel. There is no need for intermediaries when a customer orders a custom product directly from the company that makes it. Long distribution channels correspond to small purchases, either because the retailer doesnt carry much inventory or the consumer buys the item in small quantities.

130

The type of customerWho are the customers, what do they need and expect from their shopping experience, and where are they willing to go to buy this type of product? How much quantity do they buy at a time? A channel may be chosen because it best reflects the end users buying habits. Business-to-business customers have completely different needs and buying habits than individual consumers. Market sizeThis factor encompasses two things: the population of an area and whether it is urban or rural. It is easier to sell direct to customers in a large city with lots of potential outlets for a product line. The more widely dispersed the stores, the more logical the dependence on agents and wholesalersor on multiple retailers in different citiesto keep product sales strong and steady. The producers level of controlMost top-dollar clothing designers and fragrance manufacturers do not want their products showing up anywhere and everywhere. Theyve worked hard to build an exclusive reputation, and they expect their distribution channel to work just as hard to protect and enhance their upscale image. These producers will choose a distribution channel that ensures no discount merchants have access to their lines, and they will count on the members of their channel to honor their wishes and not make bargain deals. The size of the producing companyA producer is likely to sell direct when the company is large enough to handle the additional responsibilities that intermediaries would otherwise providecredit to customers, warehouses for their own goods, the ability to hire and train their own sales representatives. Smaller producers require a larger distribution chain in order to fill these roles. The size of the retailersA segment of the industry that is fragmented, with most of the stores operating as single units, requires the distribution channel to be longer. This was the case in the 1980s with video rental stores, for example, until Blockbuster Video opened and began its climb to dominate the market. TYPES OF DISTRIBUTION WITHIN CHANNELS The channel members may handle different portions of the transaction, but they must all agree on the end resultthat the product(s) will be placed in the market in the manner desired by the producer or manufacturer, and that placement of the product(s) meets the contractual agreements of producer, retailer, and everyone in-between. Once a channel is selected, the distribution strategy can take three different forms. They are listed as follows, from most restrictive to least restrictiveand remember, in retail, the term restrictive does not automatically have a negative connotation. EXCLUSIVE DISTRIBUTION:- is thought of most frequently for high-dollar products such as luxury cars or Rolex watches, but the fact is that even small-ticket items like toys are considered exclusive when they are in high demand.
131

In an exclusive distribution agreement, one retail store or chain of stores has the legal right to market and sell the product line in a geographic area. Exclusive distribution is sometimes requested by the retailer, not the producer, to ensure that the retailer has something unique, that customers cant get anywhere else. This may also mean the retailer commits to not selling any products that are going to compete with the line. In exchange, the producer or manufacturer offers sales assistance, training, point-of purchase materials, and other perks to the exclusive distributor. Such a distribution arrangement can work toward the exclusive image of the product (because its harder to get), the retailer (for having the only ones available), and the manufacturer (by implying that the company is interested in marketing quality, not quantity.) In B2B commerce, exclusive distribution works well for extremely specialized product lines, such as heavy equipment or high-tech products, ordered to the customers specifications and budgeted for in advance of the purchase. SELECTIVE DISTRIBUTION It means the retailers are carefully screened, and only a few are permitted to carry the product line. As with exclusive distribution, part of the goal here is to enhance the image of the product by making it harder (but certainly not impossible!) to obtain. This allows the retailer to charge full price. The ladies clothing industry is full of selective distribution agreements between designer labels and so-called finer department stores. (The producers may have other, lower-priced merchandise lines to sell to discounters; but these are generally sold under separate, secondary brand names.) INTENSIVE DISTRIBUTION It is the closest thing to blanket coverage in retail, a you can find it anywhere theory of marketing. Snack items, like candy and soft drinks, are great examples of intensive distributiontheir individual unit prices are so low that thousands must be sold to make a profit. Ironically, this intensive product availability requires a large and complex distribution channel in order to cover all the sales outlets, from supermarkets and convenience stores to vending machines and restaurants. Manufacturers of these products depend heavily on their wholesalers to handle the sales functionsand will drop a wholesaler who is not performing well based on sales figureswhich makes this type of wholesaling very competitive. CHANNEL RELATIONSHIPS The fact is that modern-day companies are often forced to participate in distribution channels for practical reasonsnot really because they want to be part of the team. They need the efficiency and the economy of scale, although in some ways, this kind of cooperation runs counter to the tough, competitive side of traditional retailing. Channel cooperation would be ideala joint effort of all the members to create a supply chain that is flexible, gives each partner a competitive advantage, and ultimately provides the best product and related services to the customer. However, whether youre selling candy bars or luxury automobiles, conflict does occur when the members of a distribution channel choose different ways to operate within the system, have differing goals, or balk at sharing information. Areas of potential channel conflict are many. They can arise naturally from competition between
132

multiple members of the same channel retailers or wholesalerswho carry the same product line. They will also occur when retailers have service issues with the products and want to handle returns, repairs, or exchanges differently (say, more generously) than what the manufacturer is willing to do. A very common source of channel conflict is a producers decision to either increase or decrease prices. The wholesalers take the flack about it from retailerswho, in turn, must listen to consumers complaints, at least in the case of price hikes. There is a hierarchy in all distribution channels, whether the participants like it or not. The company that has the most authority in the channel is referred to as the channel leader or channel captain. In this case, authority means the partners ability to either influence or control the behavior of any of the other partners in the channel. Its safe to say that no one in any distribution channel or supply chain wields as much authority in retail today as Wal-Mart. The worlds largest retailer literally treats its suppliers like extensions of its own businessmanufacturers and wholesalers have free access to real-time data about how their product lines are selling at any Wal-Mart store, any time. Sharing this information allows the suppliers to plan their production runs, make their importing decisions, and so on. Hundreds of manufacturers have offices in Bentonville, Arkansas, just to be conveniently located for Wal-Mart, and they consider it a small price to pay for increased access to their giant retail partner. In exchange, this Channel Captain Extraordinaire can require extraordinary things of its smaller partners, from price cuts to the acquisition and use of expensive new technology like radio frequency identification. In business-to-business channels, Ford is known for its incredibly collaborative relationships with suppliers, who do more than provide materials and partsthey help design the vehicles Ford produces.2 Similarly, any manufacturer that uses a Just-InTime (JIT) system, with offices for supplier representatives on-site in its plants, has forged a unique type of channel relationship. Like any kind of power, channel leadership can be wielded to the benefit or detriment of the other companies. WalMarts situation aside, channel captains may take the lead in negotiating with a participating company that is not fulfilling its responsibilitiesorders are late; the company hasnt updated its computer systems; it may be struggling financially; the CEO is uncommunicative or argumentative. Whatever the case, if the end result is that its bogging down everyone else in the channel, then something must be done. It is important to note that in a distribution channel, any of the participants can refuse to do business with any of the othersas long as someone amenable to the entire group is tapped to take over the role that the ousted business has played. This game of musical chairs is difficult at best and disastrous at worst. Its better for everyone if the participants can figure out how to get along.

133

STRATEGIC ALLIANCES A third and similar partnership arrangement between separate companies with products or skills to share is the strategic alliance, which allows them to share the use of already-established distribution channels in pursuit of business growth in new markets. Retailers have been forging strategic alliances since the 1950s, and the pace continues unabated today as stores continue to branch into international sales. A strategic alliance is more than two companies holding shares of each others stock , or ordering merchandise jointly for added buying power. In order to be truly strategic, the alliance must have all three of the following characteristics: 1. It must be collaborative. It should not involve the stronger channel member barking orders to the weaker one. 2. It must be horizontal. That is, it must be forged between companies of the same type, two retailers or two wholesalers. 3. It must be beneficial to both. This requires common objectives and the willingness to communicate and share knowledge. A promising collaboration would be the alliance of two similar types of retailers in two different countries to share product lines, invest in technology together, and learn from each other. In so doing, they use each others distribution channels in the new country. Retailers commonly belong to several strategic alliances. They offer a way to share the risks of business expansion that, if undertaken separately, the individual companies may lack the time, money, or expertise to manage.

134

Distribution channels of PEPSI in Jamshedpur region

Pepsi manufacturer do not sell their product directly to final users, between them stands a set of intermediatories performing various function. This marketing channel also called trade channel or distribution channel. Formally these marketing only involve in available product and services to the final users, but now they have created a set of path ways that a product or services follows after production, culminating in purchase and use by the final user. Some intermediatories like wholesaler and retailers-buy take title to and resell the merchandise: they are called merchants. Importance of marketing channels Marketing channel represent a substantial opportunity cost and is to convert potential buyers into profitable customers. Marketing channels are not just serve markets but they also make markets of the products. Pepsi pricing depends on whether it uses mass merchandise or high quality boutique. In addition channel decisions include relatively long term commitments with other firms as well as a set of policies and procedure. When Pepsi sign up an independent dealers to sell its products, the Pepsi manufacturer cannot buy them out the next day and replace them with company own outlets, but the same time, channels chose themselves depend on the company marketing strategy with respect to segmentation, targeting and positioning. In Jamshedpur Pepsi uses both pull and push strategies In some regions like Sakchi, Bhalubasa, Baridih , Pepsi use sales force trade promotion which induces intermediatories to carry promotions and finally to sell the products to the end users. These are the territories where low brand loyalty, satisfaction and preference in outlets, stores and hotels are found. Pepsi is using pull strategy in Bistupur and Telco as here consumers well understand the benefits of the product. Pepsi uses advertisement, promotion and other form of communication to persuade consumers to demand the product from intermediatories .Here in this region high brand loyalty is present and the consumers can easily perceive difference between the brands and they chose the brand before they go to the store. Hybrid channels: Pepsi link with five channels in Jamshedpur. 1. Hare ram krisna kumar treaders 2. Vijay traders 3. Shree hari treaders 4. Balajee traders. 5. Rama agency.

135

Regions dealing with hare ram krisna kumar bistupur,jugsalai,adityapur,persudi. Region dealing with vijay traders Sakchi Region dealing with shree hari treaders ranikudar,kadma,sonari. Region dealing with balajee traders bhalubasa,agrico,sidgora,baridih,telco,birsangar Region dealing with Rama agency Mango,jakirnagar,paddih,dimna Company manages the hybrid channels and they are working well together. They are matching each others target customer, preferences and even ways of doing business. Their features are as follows: 1. Ability to take orders of products and to deliver at a convenient retail location. 2. A retailer can also directly cancel the order from them. 3. They also have the right to give discount and promotional offers to outlet owners. Understanding customers needs: Pepsi divide whole outlets in three types like 1. Convenience outlet 2. Grocery outlet 3. Eatery outlet In convenience store Pepsi mostly deliver all size of bottles as from those outlets customers ask for all size of bottles. In grocery outlets Pepsi mostly deliver pet bottles as in those outlets customers come to buy Pepsi product for their whole family, so they mostly keep pet bottles. In eatery shops they keep all glass and can bottles, as those are the foodie centered so customers mostly ask for glass and can bottles. The role of marketing channels in Pepsi Channels know how and whom products to be sold? And Pepsi manufacturer often get effectiveness through those intermediatories. Through their contacts, experiences, specialization and scale of operations they can make goods widely available and

136

accessible to the target outlets, usually offering the firm more than it can achieve by his own. Channels functions and flows: Channels usually perform tasks to move goods from producers to customers. It overcomes the time, place and possession gaps that separate goods and services from those who need and want them. Channels perform a number of key functions as follows:
1. Gather information about potential and current customers, competitors and other forces in the market 2. Develop and disseminate persuasive communications to stimulate purchase. 3. Reach agreements on price and other terms so that transfer of ownership or possession can be affected. 4. Place order with manufacturer. 5. Assume risks connected with carrying out the channels work. 6. Provide for the successive storage and movement of products. 7. Provide cash memo (bill of order and price of the subsequent p roducts) to the outlets owners. 8. Oversee actual transfer the ownership from distributer to consumers.

Chanel levels: Here in Jamshedpur Pepsi follows a two level channel contains two intermediatories.

COMPANY

DISTRIBUTER WHOLESELER

OR

RETAILERS DEALERS

OR

CONSUMERS

Channel design decisions: It based on customer needs, establishing channel objectives, and identifying and evaluating major channel alternatives. Analyzing customers desired service output levels: Waiting and delivery time: The average time customers in the channel wait for receipt of Pepsi products. Customers increasingly prefer faster and faster delivery channel. Service backup: the add on service like (delivery any time, order through nay mode, provide information about product, cash refunds etc.)Provided by the channel.
137

Identifying and evaluating major channel alternatives: Companies also choose from a wide variety of channels for reaching customers-from sales force to agent, distributors.each of the channels have his own strength and weakness. Sales force can handle compels products and transaction. Distributors create sales, but company loses direct contact with customers. Manufacturer representatives are able to contact customers at a low cost per customers because several clients share a cost, but the selling effort per customer is less intense than if company sales representatives did the selling. 1. Intensive distribution: Company places products and services in as many outlets as possible, here the consumer seeks to buy frequently or in a variety of locations. 2. Ready stock Terms and responsibilities of channel members: 1. Each channel member must treat respectfully and given opportunity to be profitable. In the trade relation mix are price policies, conditions of sales, territory roghts, and specific service to be performed by each party. 2. Conditions of sales: - Refer to payment terms and producer guarantees. Producers grant cash discount to distributor. Producer also provides distributors a guarantee against defective merchandise or price decline. A guarantee against price declines gives distributors an incentive to buy larger quantities 3. Distributors territorial rights:-Define distributors territory and terms under which the producer will enfranchise other distributors. Distributors normally expect to receive full credit for all sales in their territory, whether or not they did the selling. Channel integration and systems: Pepsi co follows horizontal marketing system. In horizontal marketing system:-A conventional marketing channel comprises an independent producer, wholesalers and retailers. Each is a separate business seeking to maximize its own profit, even if this system reduces profit as a whole. And no channel members have complete or substantial control over other members. Retail store - to sell large customers Distributors -to sell to small customers But gain can be compromised by increase level of conflict over who has ownership Like in territory based sales representatives want credit for all the sales in their territory regardless of the marketing channel used.
138

The way Pepsi selects distribution channels: First Pepsi issue a tender and many of channels fill that tender, whose money issue on that tender like by pepsi that channel select by Pepsi. And before fill the tender, channel has to show his experience in market, experience in distribution, bank balance to the company. Factors affecting the choice of the channel of Distribution:There are number of channel & company is to choose any one of them that makes best in the marketing strategy followed by the company. The channel chosen achieve ideal market exposure and should meet target consumers needs and preferences. In choosing an ideal channel, the producer always has to struggle between what is ideal and what is available, what available need is not necessarily be ideal because here are number of factor limit the choices.Channel may be considered to be the best but it not always so. The main consideration in selecting the channel must be satisfaction of customers and therefore, sometimes relatively high cost channel may prove profitable. Various factors which affect the choice of channel of distribution may be classified as factors relating to Factors relating to Product Characteristics Purchase-Frequency. Perish-ability. Weight & Technology of the product. Selling price per unit. Standardized Product. Market Factors or Consumers factors Consumer of industrial product. Number of purchasers. Geographical Distribution of customers. Size. Companies or Enterprise Factor Financial Resources. Size of the Company. Product Mix. Attitude of the Company Executive.
139

Marketing Policies. Middle Consideration Services provided by the middleman. Middleman attitude. Availability of middleman. Sales Volume potential. Cost of channel usage. Environment Factors Economical Conditions. Legal Restriction. Social & Ethical Consideration. Thus the above factors influence the channel decision. The producer must consider these factors before engaging any channel for distribution. It is therefore right to say that the producer is not always free to enjoy complete freedom in selecting channels of distribution At first soft drinks is supplied to distributors directly. Retailers cannot take the delivery directly from the company. They have to take it from their respective or nearest distributors. The distributors selected on the basis of assurance given by them regarding minimum sales, which they have mention annually. The selection is also done on the basis of the financial position and reputation of distributing in the market. As for the example, in appointing distributors first priority is given to those people who are in cigarette business. Depending upon market each distributor in its initial stage deposit some security money. This amount varies between five thousand and ten thousand. The distributor selects the retailers. There is no relation between the companies its retailers. On the other hand there is no definite and fixed criteria for the selection for appointment of retailers from the side of distributors. Any one likes Panwala, Cigarette Shop Or any other shopkeeper can have the stall for the sale of soft drinks and they are called retailers or dealers. They have to give assurance to the concerning distributors for better sales and at the time of taking delivery they have to deposit the security that is the change for the empty bottle with specified purchasing price. The distributors at first have to seek the permission of the sales department for the number of cases of soft drinks required by them. After getting for the proper authority

140

from the sales department, they take the delivery from the shipping department paying the requisite either in cash or as demand draft. Generally there is no compulsion on that part of distributors to provide the transportation facilities to their retailers. But the distributors of the big areas like Dhanbad, Jamshedpur, Bokaro and Ranchi etc. provide the transportation facilities to their respective retailers. The distributors and retailers are independent to sell as they want but are controlled to some extent by the company also, as they have to give some assurance regarding minimum sales. It happens so because they are given some incentives also. They are fully independent to gear up the market, as they want. The company does the gearing job itself also and sometimes it advises them to the gearing up in a way, which is more profitable for all of them. The distributors can be dropped if they fail to achieve the required target of sales. They can be also dropped when they dont follow the instruction given by the company or when they charge high price or when they are engaged in black marketing, loading etc. But the company has not dropped any of its distributors till now. The supply of soft drink, to the distributors depends upon the Ups and Downs in sales. But, in the initial stages the distributors have to sell up to a minimum target set by the company or as decided by an agreement between the company and distributors. In the later stages soft drink is supplied as and when demanded by the distributors.

141

ADVERTISEMENTS

ADVERTISING POLICY Advertising is a fascinating and important aspect of marketing. The health of many businesses depends on the generations of effective advertising. Advertising catches the imagination of people outside the industry. Everyone seems to have opinions on the advertisement and finds it easy to attach levels to them, such as fun, humors, warm, entertaining, persuasive, boring, contriver or irritating. Advertising is basically communication and persuasive and such as long leaved on the insight of psychology and the study of consumer behavior. Thus, it is natural to look to theories, concept and research findings from psychology help to understand and manage the process. In all phases of advertising process from objective setting through campaign creation and media selection to copy of campaign evolution, research provides the thrust. Major institutions involved in the field of Advertising Process. Advertising is heavily focused on the analysis, planning, control and decision making of the core institution The advertiser provides the overall managerial direction and financial support for the development of advertising and the purpose of media time and space. Even though, many other institutions are involved in the process. The resulting is usually aired are placed several times and the resulting schedule of exposure is referred to as an advertising campaign. Thus identification and understanding of markets and consumer behaviors is also a vital part of advertising process.

142

TYPES OF ADVERTISEMENTS:DIRECT ADVERTISING Ad films, radio, newspaper ,Ad in magazine, Hoardings, Glow sign, Sponsorship INDIRECT ADVERTISING Shop painting , Wall panting, Visi coolers , Vehicle paintings SIGNIFICANT OF ADVERTISING Advertising is a non-personal promotion of goods and services, by a sponsor (a firm or person) who can be identified and who has paid for this communication. The purpose of advertising is to lead to an immediate sale, or a sale at home later date when the customer may find a need for the product. The purpose of advertising is to sell something; this gole is reached by specific objective that can be expressed in individual ads that incorporated into advertising campaign. Recall again from the buying decision process that buyer go through a series of stages from awareness to purchases. Thus an immediate objective of an advertisement may be to move target customers to the next stage in the hierarchy-say from awareness to interest. Objective of advertising strategy: Support personal Selling :- Advertising may be used to acquaint prospects with the sellers, company and products, easing the way for the sales force Improve Dealer Relations:- Wholesaler and retailer like to see a manufacturer support its product. Introduce a New Product:-Consumers need to perform even about line extensions that make use of familiar brand names. Expanding the use of Product:-Advertising may be used to lengthen the season of the product increase the frequency of replacement or increase the variety of products uses. Counteract substitution:- Advertising reinforces the decision of existing customers and reduces the likelihood that they will switch over to the alternative brands.

143

ADVERTISING STRATEGY OF THE COMPANY The main motive behind the purpose of advertising of the bottles of PEPSI Co. is to maintain the brand loyalty through recalling the memory of the users of soft drinks as to attract the potential consumers who consume a soft drink on the spur of the moment. All the bottles of India to advertise he produces Pepsi, 7Up, Mirinda, Slice, mountain dew as per the norms and guidance of the Pepsi Co. of India. On the national basis using a number of media. The media extensively used are: Newspaper, short advertising films, Radio, TV. Besides the advertising being carried out by Pepsi Co. the bottles SMV Beverages Pvt. Ltd., Jamshedpur also carries out its own promotional program of which advertisement is an important aspect. The S.M.V. Beverages Pvt. Ltd. Is free to use any media, messages, copy etc. as and when required by them but one single factor which remain the same as used for each Pepsi Co.s bottling company on national level. The main slogan being used by PEPSI Co. bottler all over India for its Cola Products has been The choice of new Generation. Out of these Pepsi invests heavily in advertising through TV. Brand ambassadors of Pepsi include film stars, cricketers and other sport persons. PepsiCo gives these brand ambassadors hefty sums running into many corers to endorse their brands. Some of the brand ambassadors of PepsiCo associated with the different brands is:Shahrukh Khan Sachin Tendulkar Amitabh Bachchan John Abraham Zayed Khan Mallika Sherawat Pepsi Pepsi Pepsi Diet Pepsi Mirinda 7up

Mahinder Singh Dhoni 7up Kareena Kapoor Govinda Preeti Zinta Ranveer Kapoor Katrina Kaif - Pepsi Mirinda - Pepsi - Pepsi - Slice
144

YEAR WISE ADVERTISING OF PEPSI SINCE 1990 After entering in India PEPSI started their advertising is planned way to fulfill the objectives expressed by Vibha Rishi, Executive Vice President, and Marketing Pepsi India, as We believe in advertising that leaves a smile on your face. In 1990 The first commercial came on screen with actress Juhi and Pop Singer Remo. The theme was Feel the music. Are you Ready for the Magic! Went the jungle and this ad ends with opening of Pepsi Bottle. In 1992 The famous and unforgettable punch lineYehi Hai Right Choice BabyAha! was introduced with Remo and twelve years old Penny Vaz. In 1993 Can I have Another Pepsi. In 1994 Here Pepsi introduced cricket star Sachin Tendulkar, Vinod Kambli and Azhar in which Sachin and Kambli fight for Pepsi bottle and in the meanwhile Azhar comes and takes the bottles this ad also ended with the same punch line Yehi Hai Right Choice BabyAha!. In 1995 In this commercial when Akshay is given another soft drink. Then the kid in the audience shouts Hai Akshay Pepsi and he gets back his magic and this ad also ends with the same punch line. In 1996 Here the commercial shows the enthusiasm of Shahrukh to get pepsi for his girl friend. He dodges the dog and with this he tries to show that Pepsi is the active choice to get foe which the customer can do anything, and it is also revealed by the line Pepsi To Mai Pe Ke Rahunga. In the same year Sachin, Azhar and Kambli introduced the slogan Nothing Official About it. In 1997 In this year Pepsi celebrate the 50 years of Indian Independence by the slogan Azadi Dil Ki with Shahrukh and Azhar. In 1998 In this year Pepsi has again involved many cricket stars for commercial with slogans More Cricket More Pepsi, Got a keep a cool ahead, and Generation Next . Beside this it has also flashed many commercials Leander Pace & Mahesh Bhupati for Mirinda (Orange) Mirindaaa for Mirinda (Lemon) The commercial for Mirinda lemon done by the bollywood star Amitabh Bachchan gave

145

tremendous realJhatka to competitor with the help of memorable punch line Jor Ka Jhatka Dhere Se Lagewhich is ruiling heart throbbing of millions. Apart from all these commercial Pepsi has sponsored many Sharjah Cup at Sarjah. PEPSI Independence Cup in INDIA YANNI Concert in AGRA Asia Cup in SRILANKA In 1999 World Cup 99 was sponcered by Pepsi The ad featured Shahrukh Khan and Sachin Tendulkar and the punch line Yeh Dil Mangay More become very famous. In 2000 Ad featuring Shahrukh Khan, punch line Yehmore In 2002 Ad featuring Shahrukh Khan, Amitabh Bachchan, Kareena Kapoor, Sachin Tendulkar , Adnam with the same punch line. In 2003 Ad featuring Fardeen Khan, Saif Ali Khan, Kareen Kapoor, Preeti Zinta with the punch line Mousam Gram Hai Pepsi ke Liye Hum Besharam Hain. In 2003 ICC World Cup was also sponsored by Pepsi, featuring Shahrukh Khan in the ad. Also an ad was featuring Sachin Tendulkar, Shane Warne & Carl Hooper punch line Bagha Diya Na. In 2004 - Ad featuring Shahrukh Khan who done the Army uniform to promote the new positioningYe Pyase Hai Badi. In 2005 - Ad featuring Shahrukh Khan with the punch line Oye Bubley. In 2006- Ad featuring Shahrukh Khan and John Abraham Its my Can . In 2008- Ad featuring Ranveer Kapoor with a punch line yeh hai youngistaan meri jaan In 2009- punch line har street ko jeet. In 2010:Every Pepsi refreshes the World

146

ANALYSIS AND INTERPRETATION

MARKET SHARE OF PEPSI IN SOFT DRINK SEGMENT IN JAMSHEDPUR

70%
60% 50%

40%
30%

pepsi

c ca -c la others

20% 10%
0%

PEPSI- 32% COCA- COLA- 58% OTHERS- 10%

147

Do you purchase the soft drink for your shop?

60 50

10 0

Which soft drink would you like to purchase more in quantity?

C c c l



S kchi-1

S kchi-2

Refugee c l ny

148

    

80 70 60 50 40 30 20 10 0

  

S kchi-1

S kchi-2

c l ny

epsic

40 30 20

90 80 70

Yes N

How many retail outlets are there in this locality?

How many numbers of bottles are you selling per day? Sakchi
8 7 6 5 4 3 2 1 0

150-200
100-150 50-100 ct-50

Less th n 10

149

&

""

10

20

30

B h

kchi-1

kchi-2

Refugee c l ny

More th n 200

%$ #

40

50

60


Pure
I pure

70

80

Sakchi
7 6 5 4 3 2 1 0

More th n 200 150-200

100-150 50-100 ct-50

Less th n 10

Refugee colony
6 5 4 3 2 1 0

More th n 200
150-200 100-150 50-100

ct-50

Less th n 10

Are you satisfied with the service given by salesman?

Refugee colony

Very often

ften

ometimes

Rarely

Never

150

2 2

0 1 0 0 1 1 0 1 1 0

90 80 70 60 50 40 30 20 10 0

akchi-1 akchi-2

'

'

What type of interaction you are having with salesman or companys man?

How frequently salesman visit to your outlet?

70 60 50 40 30 20 10 0

Refugee c l ny

151

55

8 8

3 4 3 4 3 4 4 3

10

20

F rmal

Frien ly

Ru ely

Interacti n

55

30

Refugee c l ny

7 7

40

50

3
akchi-1 akchi-2

60

4
akchi-1 akchi-2

70

Do you want to improve the service of the company?

70
60

50 40
30 20

10
0

Pick out the option as applicable: Always A, Many times- M, Sometimes- S, Rarely- R, Never-N 1. 2. 3. 4. 5. 6. 7. 8. 9. Satisfied with the companys product and quality Salesman easily changes your damaged or outdated stocks. Companys man(CE and ADA) come at your counter regular Company man listen and solve your service related problem Provides you enough accessories( helping tools) Salesman take care of companys accessories Service of the company match with your expectations at the actual service. Are you satisfied with the companys product and quality Are you satisfied with the scheme given along with the product

9 @ 9 9 @ @ 9 @ @

80

Yes No

akchi-1

akchi-2

Refugee colony

152

Sakchi-1
6 5 4 3 2 1 0

N R

M A

Sakchi-2
6 5 4 3 2
1 0

N R

M A

153

Refugee colony
7 6 5 4 3 2 1 0

N R

S M A

How describe the services of PepsiCo? (Each block contain 10% out of 100%) Efficient -------------------inefficient Fast ----------------------slow Reliable ------------------------unreliable

70 60 50

40 30 20

10

Sakchi-1

Sakchi-2

Refugee colony

154

D E E E E D D D D

80

Efficient __ __ __ __ __ __ __ __ __ __ Inefficient Fast __ __ __ __ __ __ __ __ __ __ Slow

Relia le __ __ __ __ __ __ __ __ __ __ Unrelia le

Please indicate how strongly you agree or disagree with the following statement of the companys service? Strongly agree-SA, Agree-A, somewhat agree-SWA, Disagree-DA, Strongly disagree-SD Meeting with salesman is creating healthy environment Availability of all types of products at a time Availability of products in sufficient quantity Enrolled you in companys various plan Solve your problem in very short time Change companys faculty accessories immediately Sakchi-1
7
6

5 4
SD

3 2
1

DA SWA A
SA Meeting with Availability of Availability of nrolled you salesman is all types of product in in company s creating products at a sufficient various plan healthy time quantity environment Solve your problem in very short time Change company s faculty accessories immediately

155

Sakchi-2
7 6
5 4 3

SD DA
S A

1 0
Meeting with Availability of Availability of n rolled you in Solve your salesman is all types of product in company s problem in creating products at a sufficient various plan very short healthy time quantity time environment Change company s faculty accessories immediately

SA

Refugee colony
7 6 5 4

3 2 1 0

S A A SA

156

Meeting with salesman is creating healthy environment

Availability of Availability of all types of product in products at a sufficient time quantity

nrolled you in Solve your company s problem in various plan very short time

Change company s faculty accessories immediately

SD DA

Do you want any improvements in the company?

50% 45%

40% 35%
30% 25%

Sakchi-1
Sakchi-2 Refugee colony

20% 15%
10% 5%

Time Management

Service

Scheme

Interaction

157

MERCHANDISING AND MARKET SHARE OF PEPSI AND COKE

MERCHANDISING POLICY In todays fast moving industry and highly competitive market, only those products are likely to be purchased which are capable of hitting the impulse of the consumers. The products appeal should be able to penetrate and embedded into the perceptual space of the consumers mind. The concerned product should induce to the consumers. Pepsi believes that Jho Dikhta Hai Who Bikta Hai i.e. any product which is visible is bound to be sold. METHODS OF MERCHANDISING These are methods of increase the visibility of product:o Visi-cooler placement o Glow signboard o Paintings o Crate Stacking o Umbrella o Banners o Danglers o Sun Packs o Display Scheme o Special Schemes

In the era of globalizing and liberalization the competition in the market has become very tough to beat the competitor the company has to improve itself, and see how customer can be best satisfied or how customer can be delighted. Each company has to develop strategy for the following purposes:-.
y y y y

Aware the customer about the product Make the customer feel that they are important and company is given best of the products. The services associated with the product is if high quality. To increase its growth and sales and be market leader .
158

CASE DISPLAY This is one of the important and foremost merchandising activity in which we relate to one of the promotional activities that bring about in store displays. It is the matter of the fact that the Pepsi Cola carets, which is the plastic container, which is designed in such a way that it can contains in bottles at a time are displayed properly and effectively in front of the counter or shop. This will make aware to the customer, that Pepsi product is available in the counter. At the same time it enables the retailer to know about the stock available in his shop. So, we were assigned the task to check up the display and help it to visualize the case display properly. WARM CASE DISPLAY These are the empty cases, which is to be display in front of the outlet, so that the people could easily recognize that Pepsi Product is sold here. So, here our work was to display the warm case in from of the outlet. VISICOOLER CHARGING Generally, the consumers demand the soft drinks in the chilled conditions, which is only possible to have a Pepsi Chilling apparatus either fridge or icebox . So, we were assigned to check whether the cooling apparatus is performing well and good up to mark with the Pepsi Product. VISICOOLER PURITY By cooler purity we mean to say that the cooling apparatus that is either fridge or icebox is fully charged with the Pepsi Product only. Here we were assigned a job to check out whether the cooling apparatus is best utilized by the Pepsi products or not. If not then arrange the cooler with the particular product of Pepsi. RACK DISPLAY Special type of Rack, which as been provided by the company in order to keep the pet jars of 1 ltrs, 1.5 ltrs, 2 ltrs and 500 ml,600ml. Its a plastic stand with sonic racks, which is used to display pet jars available at the particular outlet. This serves the dual purpose. First as a mode of advertisement and the other utility is used to deep all the pet jars available in the outlets. Our job were assigned to check out whether the retailers are utilizing the stand properly or not, if not then we would have to arrange it properly

159

VISICOOLER PLANOGRAM (p-O-G)

Visicooler Planogram is a part of merchandising where main focus was to check the purity, charging and visibility of the visicooler. Different size of visicooler had different types of arrangement of flavours of pepsi products. The different sizes of visicooler are 220ltr,300ltr,320ltr, 400ltr, 440ltr,650ltr, 1200ltr etc. Planogram is a process of filling of visicooler with the Pepsi and pepsi products. Its is mandatory that the Apart from this we also look into the factor the visi is kept on the correct place to enhance its visibility because Pepsi believes that Jho Dikhta Hai Who Bikta Hai i.e. any product which is visible is bound to be sold. Moreover we know that only COLD IS SOLD. The main aspects of the Planogram are
y y y

100% Purity Charging . Visibility.

100% PURITY IN VISICOOLER By cooler purity we mean to say that the cooling apparatus that is either fridge or icebox is fully charged with the Pepsi Product only because some retailers keeps the other products like coke products , fruity , milk etc. Here we were assigned a job to check out whether the cooling apparatus is best utilized by the Pepsi products or not. If not then arrange the cooler with the particular product of Pepsi and other extra product were removed. CHARGING Generally, the consumers demand the soft drinks in the chilled conditions, i.e, only COLD IS SOLD which is only possible to have a Pepsi Chilling apparatus either fridge or icebox . So, we were assigned to check whether the cooling apparatus is performing well and good up to mark with the Pepsi Product. These helps in effective utilization of visicooler . While charging the visicooler we had to put the flavours of Pepsi in a sequence like Pepsi, 7up, Mirinda , Mountain dew, Slice , Nimbooz, Aquafina and it was cleaned properly before putting into the visicooler. VISIBILITY AND POG To check that visicooler is kept on the correct place of the outlets so that it increases the visibility and sales. And POG involved the sequential placing of bottles/cans/tetra packs of different flavours.

160

The retailers who maintained the POG gets the monthly incentives of Rs 300 and 500 by the company depending on the size of visicooler when the auditing was done. These motivates the retailers to maintain the visicooler according to the POG. Steps in Planogram when it is implemented for the first time:1. Empty the visicooler 2. Clean the visicooler 3. Clean the bottles with duster. 4. Pepsi products are kept first on the down shelve of the visicooler. 5. Then the bottles are kept on the upper shelve with the distance of 2 inches between the racks. Then according to P-O-G the visicooler is charged as the picture shown below.

POG IN VISI SIZE 220 Ltr , 300 Ltr According to the POG there should be Pepsi 40% , 7up- 35%, Mirinda- 10%, Dew- 5%, Slice- 10%.The percentage of Pepsi is more to maintain the identity and brand of Pepsi. Steps in Planogram when it is implemented for the second time:

161

1. Check the cooler. 2. Determine the number of bottles of each brand or flavor required to fill the cooler 3.according to the POG sequence. 4. Clean the bottles/cans/tetra packs with the duster. 5. Place the products in the lower shelve first 6. Maintain a gap of 2 inches between the bottles and the upper shelve 7. Repeat the process 8. Charge the products according to the prescribed sequence of POG 9. Ensure that the cooler is 100% charged. The positive aspects/functions of planogram are as follows: 1. It accelerates the visibility of the products. Products of all the flavours are displayed in the visicooler in a sequence . thus it increases the sales. Increases the range selling. 2. It helps to determine the market gap. Market Gap is flavour of pepsi not found in the outlets. The aggregate of all the outlets helped to determine the market gap. 3. Helps to take the orders of the products to the PSR(pre sales representatives) 4. Helps to know the SKUs sold more in a particular outlets and the aggregate of that determines that of the market demand. 5. Customer can choose the flavor with ease. Some highlights of Planogram: 1. Its a studied and researched Planogram for each market ( based on cooler and sale in each market) 2. There is more stocking for fast selling SKUss. 3. Its a win win solution for retailers, Salesman, and PepsiCo.. Because if the retailers sales increases, the salesperson target is achieved and thus the target of the company too. If followed well an average retailer can get 50% increase in its sale and there can be 40% stock rotation. 4. There is no changes in the Planogram i.e, there is one Planogram followed throughout the year. Thus it is rightly said that .. Planogram se sajaane me hi hai bhalai , zaara si mehnat aur dher saari kamaai !!!!
162

Problems faced while doing P-O-G 1. Some of the outlets did not allowed us to enter into the outlets to check the visicooler and do the P-O-G. 2. Some did not allow us to do P-O-G when the customers were in the outlets and we had to wait patiently. 3. In some of the outlets there were low stocks due to which P-O-G could not be done. Complains of the outlets determined while doing P-O-G
y y y

Distribution problems of the products .Products not reached to the outlets in the peak period . Visicooler not working in some of the outlets. Some of the outlets had problems with scheme given by the distributer.

How did we solved the problem

y y y y

y y y

During our training period for POG , we faced problem while doing POG. We solved by the following ways: When there was a shortage of flavour at any outlets we informed to the respective distributer and the customer executive of the respective place. We informed the problems to the concerned customer executive of the place to solve the technical problems related to visicooler Some retailers were not interested in POG . to motivate them for the same we explained the benefits of POG and various schemes which were available for the retailers for POG and maintaining visi pure. pepsi cool zone is one of such scheme, which was available during that period of time for the retailers Outlets where only few flavours or brands of pepsi are sold not all flavours, we placed one available flavour in each shelve of the cooler. E g. in sagar bar sakchi , where only three brands of pepsi are sold , which are pepsi, 7up, and pepsi- soda water.

163

MARKET SHARE
Market share of Pepsi and Coke with reference to warm stock, cold stock, and empty stocks In present scenario the size of market and number of competitors is continuously increasing with a accelerated rate. To prepare a competitive strategy it is required to know about the competitors. In Jamshedpur market there are many substitute products of Pepsi like footie, real fruit juice, jumping , amul cool, lassie, etc. but the main competitor is coca cola, so before going to implement any strategy it is necessary to analyze the present market situation. Objective of market share analysis,
y y y y

To know the present situation To analyze the present situation To evaluate the gaps To find solutions to eliminate or to reduce caps

MARKET SHARE OF PEPSI AND COKE in S.M.V. Beverages Pvt. Ltd. is based on two different type of survey:MARKET SURVEY Market Survey is one of the most widely used marketing research techniques. Its purpose is collecting specific data concerning the market that cannot be obtained from the companys internal record or from external published source of data market survey may be of various types like-census survey etc. DEALER SURVEY Dealer survey as the word indicates is the survey of every dealer of soft drink in the area. For practical purpose the dealer not only includes the authorized dealer appointed by the company but it also includes the retailers big or small grocery shops, stationary, restaurant, betel shop etc. Besides these the various exclusive stalls and sales of pantry cars are also included in it. In a nutshell, by dealer we mean those
164

who are dealing with the soft drink in someway or the other in large or small quantity, directly or indirectly. Thus our study includes all such dealers which include various aspects Route wise no. of dealers
y y y y y y

Crate strength Per day sale Chilling aid Advertising Nature of outlets Schemes & Pay-Offs.

Dealer survey is primary method by which one gets first hand information with respect to the following factors:Knowledge of market in terms of:y y y

Number of dealers Location of dealers Type of dealers

Market output i.e. case stock, no. of glow sign, no. of visi cooler. From this we know how good we are in the market place and in the areas where we are lacking. It may be found that in some place only the competitor brand available, then by the help of survey we can find out the reason behind non-availability of PEPSI brand in that specific area. The knowledge of case stock will indicate our case-in-trade and that of competitors. This will indicate our case velocity which will help to plan our bottle as well as whether our distribution is effective or not. If our case stock is low then we may decide upon a case stocking campaign. Feedback from the market place regarding servicing of dealers will help us to improve our servicing in the weaker areas. Therefore, appropriate marketing strategies can be worked out depending upon the findings. Distribution Effectiveness:From the dealer survey we can find out the number of dealers and the stock and other details. Non-buyers will also be located. Activation of non-buyers can be done
165

immediately. With the above knowledge one can increase the number of routes to get increased dealer coverage and hence more effective distribution and higher sales. Also details of this will help to check up on the route selling of salesman, so that we can control them by closely monitoring their performance Training group for future executive:Good investigators from these surveys can be recruited to take up future jobs. These people will ideally suitable, as they would know the market thoroughly.
y y

They should visit the counter on the daily basis including the remote places. Salesman should visit the counter on weekly basis.

How to increase distribution effectiveness:After the above survey, the company can improve the distribution network.
y y y

Immediate activeness of non-buyers Improve the dealer coverage Increase the realignment of routes

ThereforeDealer surveys are important keeping in mind that distribution forms the major marketing activity in our industry and also that through these surveys one acquires knowledge of the market. It should be also added here that continuous dealer surveys are required because of the following reasons:A.) As our turnover increases we require skills to tackle the problem and dealer surveys help in acquiring first hand as to use the skills effectively. B).With our increased growth, investment of money are increased for various marketing inputs e.g. case stock, advertising etc. and by survey we can get an indication of the areas in which investment should be made to get the maximum benefits

166

DATA ANALYSIS AND INTERPRETATION

In order to know the market share of Pepsi among its competitors. We conducted a survey in Kadma and Sonari. To do the market survey we visited the outlets of kadma and Sonari. We interacted with the retailers and build a report with them . We also came to know how to deal with the different types of retailers .Feedback from the retailers helped me to find out where the Company was lacking in terms of service provided and also how the competitors fared on the same parameters. These feedbacks help the company to improve its services and as such increase retailer satisfaction which in turn results in better sales and revenue generation. Visiting the kadma and Sonari market and took the information of outlets and took the average stock of warm stocks, cold stocks, crowns and empty stocks the market share was determined .

TOTAL VISITED NUMBER OF OUTLETS IN KADMA & 117 SONARI SELLING COLD DRINKS:

167

MARKET SHARE OF PEPSI AND COKE BASED ON NUMBER OF OUTLETS IN Kadma &Sonari

COMPARISION BASED ON No. OF OUTLETS

44% 56%

PEPSI EXCLUSIVE C KE EXCLUSIVE

INTERPRETATIONS In the area of Kadma and Sonari the no of Pepsi exclusive outlets are 41 which occupies the 56% of the market and Coka -cola exclusive outlets are 32 which

occupies the 44% of the market. And the rest 47 outlets are mixed outlets.It means that pepsi is market leader in case of coke outlets.

168

MARKET SHARE OF PEPSI AND COKE BASED ON VISICOOLER

COMPARISION BASED ON VISICOOLER

47%

PEPSI

INTERPRETATIONS:In Kadma & Sonari the no of outlets having pepsi visicoole is 58 which occupies r the 53% of the market and coke visicooler is 52 that occupies the 47% of the market. And the rest 7 outlets are without any visicooler.That means pepsi is the market leader in the case of visicooler.

169

53%

C KE

MARKET SHARE OF PEPSI AND COKE BASED ON SIGNAGE

C M ARISI N N SIGNAGE

48%

52%

CO E

INTERPRETATION Based on signage i.e, glowsine board , Banners, Dealer board, fridge, Bunting, Painting, etc. Pepsi occupies 52% while coke occupies 48%.

170

W VUU

E S

MARKET SHARE OF PEPSI AND COKE BASED ON STOCKS

C M ARISI N N ILLE ST C S

54

CO E

INTERPRETATION:Based on filled stocks of warm and cold ,and empty of both the product in mixed outlets of 44 ,we analysed that pepsi occupies 54% and coke occupies 46% of the market.

171

46%

PEPS

FLAVOUR WISE MARKET SHARE OF PEPSI PRODUCTS IN KADMA & SONARI

FLAVOUR WISE EPSI PRO UCT

13% 31%

7 P 21%

MIRINDA SLICE
MOUNTAIN DEW

16%

19%

INTERPRETATION In Kadma & Sonari flavour wise demand of the Pepsi products we see that Pepsi(31%) demand is more, than comes slice(21%)

,7up(19%),mirinda(16%) , mountain dew(13%) respectively.

172

PEPS

FLAVOUR WISE MARKET SHARE OF COCA COLA

FLAVOUR WISE COCA-COLA PRO UCTS

8%
10% THUMPS UP

28%

SPRITE

MAAZA 14% FANTA LIMCA

16% 24%

COCA-COLA

INTERPRETATION Based on the flavour wise share of coca-cola products we found that thumps up leads , followed by sprite, maaza, fanta, limca, coca-cola respectively.

173

Analysis of the Dealer Questionnaire:Some of the questions asked to the dealers of the market are as follows:What is sold more among the pepsi products? We got the answer that it depends on consumer preference. Some said that demand of slice is more because of its mango taste while other said that pepsi product are demanded due to its sweet taste. And demand for 7up is more than dew Whether they are satisfied with the distribution channel of Pepsi? They replied that they are satisfied with the distribution channel. Mr. Ajit Mallik(the distributor) of Kadma/Sonari routes the market everyday and also fulfills the demand in case of emergency.Through this question I tried to find out from the retailers whether they are aware of the schemes of the company. Through this I came to find that even in the interior area also the retailers are aware of the company schemes and it is offered properly by the distributor and sales man. This showed the effectiveness of Pepsi distribution channel. Whether they are satisfied with the scheme given by the company and distributor? Around 5% outlets were dissatisfied and complained that schemes are not informed to them by the distributor . Rest are satisfied. Do you get every S.K.U. (stock keeping units) pack wise on demand? In this question stock keeping units means the entire flavor that mention in the cashmemo. After analyzing this question I found that a dealer gets the entire flavor which are available in the market If any time, any flavor is not available with the Pepsi vehicle then that gap gets fulfill in next 12 to 24 hours or according to the demand and necessity of the product.

174

What is sold more among water? The most preferred local brand of mineral water is Hard rocks,Hi tech and Kempty the reason for which is its effective pricing policy along with good distribution strategy comparatively to Aquafina .Aquafina has got a good demand. The reason for this is the low price of local brands w.r.t. Aquafina and also lesser margin on each bottle of mineral water sold. If Aquafina can lower its price it can be the No. 1 choice of the retailers. Which company provides better service Pepsi or Coca-cola? We found that Pepsi is leader in case of giving schemes and sale of Pepsi volume wise is more than that of coke but coke comes out as a clear winner in case of after sale service. There have been to many grievances from the retailers of pepsi outlets . From the feedback that I got from the retailers I can conclude that in the Kadma & Sonari area if there is problem in visicooler it takes time for the mechanic to operate on time. Again regarding the replacements of the products it takes time While this is good in case of coke.

175

OPERATIONAL PROBLEMS Problems in the Operation of Market Activation 1.Pricing problem

y y

More scheme to big retailer in comparison to the smaller one. Pricing differences caused due to infiltration.

2.Supply
y y

Irregular supply, untimely supply Unavailability of some of the products all the time.

3. Fat Dealers Fat dealers are the traders who buy products in bulk from the distributor and delivers to the retailer through their own means. Fat dealers have the hay in the markets where there is no presence of company-authorized distributor.
y y

Certain schemes differences Degrading image of the company.

1.Infiltration
y y

Creating war between the distributors. Creating difference in price and scheme.

2.Communication problem
y y

Lack of proper information about the schemes to the retailers. Retailers (in certain cases company personnel) are not pre-informed about the upcoming schemes and offers. Sometimes it causes unnecessary blockage and low scales of coke.

External Obstacles: The PepsiCo Company faces many obstacles when trying to maintain the success of the company. Competition is one of their many obstacles. Competition is an obstacle because it makes it harder for the Pepsi Company to sell their products when there are other companies with similar products. The PepsiCo company need to be able to differentiate their product from other products such as Coca cola and make Pepsi look and taste better to the public. To cope with this problem the company could offer
176

better or lower prices then their competitors. Also they could have better advertisements for the product. Other external obstacle PepsiCo has to face is pleasing its consumers. The PepsiCo Company needs to make sure that they keep their regular consumers happy while gaining new consumers. To do this the company needs to maintain good selling prices for their regular consumers and come up with new products to try to gain the interest of new consumers. Constantly coming up with new and better products than that of the competitor could be a huge obstacle for the Pepsico Company. It is always good to be ahead of the competitors when it comes to having new products to sell. New and different products are needed to help keep the company stay ahead of the competition. Before launching a new product it would be helpful if the company did a taste test so they know if the public is willing to buy that product or if it will be a waste of money and time. The PepsiCo Company also has to worry about having to adapt to using recyclable products rather than the reusable type of bottles. The company also has to maintain state of the art bottling machinery in order to stay ahead of the competition in terms of efficiency and labor reduction cost. This could be a obstacle because the company is use to dealing with the reusable type of bottles and having to change with consumer demands. The PepsiCo Company will cope with this problem by changing the manufacturing of the bottles and benefiting from the efficiency of modernized equipment. While there would be substantial upfront costs, the long term benefits of a modern bottling plant will decrease overhead costs and increase profit in the years to come.

177

CONCLUSION
Market activation has major impact on consumer buying behavior. PepsiCo is planning aggressively on market activation plans. The company makes significant marketing expenditure in support of the brands, including expenditure for advertising, sponsorship fees and special promotional events. As part of the marketing activities, the company, at its discretion, provides retailers and distributors with promotions and point-of-sale displays; his bottling partners with advertising support and funds designated for purchase of cold-drink equipment; and consumers with coupons, discounts and promotional incentives. These marketing expenditure help to enhance awareness of and increase consumer preference for the brands. PepsiCo Company believes that greater awareness and preference promotes long term growth in unit case volume, per capita consumption and the share of world wide non-alcoholic beverage sales.

178

SWOT ANALYSIS
STRENGTHS:PEPSI has an excellent brand image. PEPSI has effective and stronger base in India than its competitors like COKE who too have a good name in soft drink market.
y y y y y y y y

y y

Retailer friendly schemes. Continuous & strategic improvements in the promotional strategies. Introduction of new flavors continuously from time to time(like nimbooz) Large number of celebrity endorsed. A very good sales force. Branding is one of Pepsis greatest strengths. Demand of Pepsi brands is more than Coca-cola brands. Pepsi is the highest selling brand in INDIA, having a major share in Jamshedpur market.

y y y y y y y y y y

Highly motivated sales team. Due to health awareness Slice has captured a big market this year. Co-operate identity. Innovation. Various types of packaging. Consumer loyalty. Largest market share in the soft drinks market. Pepsi is planning aggressively on market activation plans. Pepsi has stronger pull effect as compared to the brands of Coca-cola. Pepsi is way ahead in numbers as compared to Coca-cola.

179

WEAKNESSES: y y y

Scheme and offers are not disclosed properly to all the outlets Replacements of the products is time consuming and long procedure PEPSI not able to keep the retailers satisfied as they are not providing with the coolers on time as compared to COKE.

Interior part of the city is not looked after as the main city as the roads are not good enough for the vehicles to reach there.

Support material not provided to the retailers as being provided by the competitor (Coke).

In terms of Stands, Dealer board, and other Add. Material Coke is ahead of PEPSI in Jamshedpur

y y y y

Margin provided by Pepsi was lower as compared to Coca-cola. No supply of Pepsi brands on credit to the retailer. Personal biasness of the company people often reflected on the material issued Distributors and sometimes salesman dont give full schemes to the retailer in spite of getting scheme from the company.

y y

Scheme is not uniform in all the areas. Late, irregular and untimely supply by salesman does not enable him to cover all the soaps while Coca-cola has deep reach hence mass penetration.

Frequent changes of salesman creates problem for retailers to acquaint the Bonfide retailers of particular distributors.

Company salesman doesnt give proper bills to all the retailers.

180

OPPORTUNITIES:y y y y y y y y

Enjoys top position in the Jamshedpur market in case of voluminous sale. Consumers are showing increased interests in PEPSI products. Promotional activities provide it an edge over the competitors Top position in C.S.D. products in India gives it an advantage. Pepsi can explore its distribution network in interior area also Many new organizations coming up with Retail, Tourism and Service sector. Expansion into new markets. Offices like Genpact, Infosys and Wipro are the imaging corporate as a key customer for Pepsi.

y y

Market activation has major impact on consumer buying behavior. Merchandising of Coca-cola is weak in the Market. Thus by putting Emphasis over this Pepsi can gain Competitive advantage.

Saturated urban market, so company has to look for products penetration in rural areas.

181

THREATS:y

Some dealers are not very satisfied with the services of Pepsi which directly affect the sale of product.

y y y y y

Competitors products already available in the market with similar schemes. Tough competition from Coke. Strategic pricing by competitors may affect the companys wafer thin margins. Pesticide controversy taking away the consumer. Many religious Guru asking there followers not to consume soft drinks like Ramdev baba has named it as a toilet cleaner.

Coca-cola growing at twice the speed in generating new key accounts as compared to Pepsi. The threat of substitutes, however, is a very real threat.

y y y

Western attitude against capitalism. Court Ruling There is a serious problem of infiltration of goods by distributors in other areas.

Various packed juices are coming to the market, which might affect the sales of Cold drink.

Coca-cola Products are easily available on credit basis, which is not possible in case of Pepsi.

Government policies towards beverages are making both the customer and the retailer skeptical towards Cold Drinks.

182

FINDINGS
1. The market share of PepsiCo is higher than the other products and among the products, Pepsi is largest selling product. 2. Sale is based on the display, so soft-drinks market introduced racks. It is the part of advertising and other part of the advertising is glow-signboards. 3. Chilling equipment are main part of sales promotion. 4. Coca-cola rack availability in the market was at the large scal 5. In some cases products of Coke and Pepsi are placed together in warm display as well as in the same Visi coolers. 6. The visibility of the Coca-cola products is more attractive because of its promotional tools and schemes. 7. All the flavors are not available at all the outlets at the same time. 8. The Coca-cola is providing more facilities to retailers. They provide good after sale services. 9. Some of the retailers of PepsiCo are not happy with the service rendered by our delivery van. 10. Coke give good amount to key customers as a marketing support while Pepsi does not give good amount as a marketing support while pepsi does not give good amount as a marketing support. 11. There was acute shortage of slice and aquafina in the outlets. 12. Sometimes the schemes are not properly known to the retailers. 13. The offer and other scratch cards were not provided to the outlets due to which retailers were dissatisfied. 14. Most of the dealers want glow sign and chilling equipments, which they are asking from long time.

183

LIMITATIONS
1. Time Constraints: There was limited time each day and lots of task to be performed. 56 days were not sufficient enough to study the market complexity and to formulate strategy. Though, I tried my best to complete assigned work effectively. 2 Convincing people: Very few people have knowledge about the products of PepsiCo. They are not well aware about the brand of PepsiCo. So that was a very mind boggling task to create awareness in each and every customer. But that seems to a good experience because it enhances my confidence. 3. There were many Issues/problems between Customer and Company and Distributor. 4. There was lot of intervention from company personnel during formulation and implementation of the strategy. 5. Budgetary Constraints were there. 6. Strategy was formulated on the basis of assumption that during the course of implementation all the other factors which affect the Sales (in volumes) remain constant.

184

SUGGESTIONS
1. We should develop a customer care centre focusing on relation development with retail outlets. This customer care centre will try to solve the problem faced by the retailers. The retailers can place their order directly by Tele-Phone in order to avoid the shortage of supply. This thing can maintain a direct connection between company officials and retailers. 2. Display and the availability of the products should be proper and well managed. 3. Visi cooler should be in prime location, attracting consumers attention. It should be noted timely that the complete product line of Pepsi should be available at all the outlets. 4. In accordance with the BCG (Boston Consulting Group Matrix) matrix, I would recommend the following strategies for Pepsi products in each category: 5. Dog Strategy: Either invest to earn market share or consider disinvesting. Star Strategy: Invest profits for future growth. 6. Question Mark Strategy: Either invest heavily in order to push the products to star status, or divest in order to avoid it becoming a Dog. 7. Cash Cow Strategy: Use profits to finance new products and growth elsewhere. 8. Pepsi should have more monopoly counters and key discount outlets. 9. Vehicles and Visi-coolers should be maintained regularly. 10. Institutional selling should be promoted. It includes that organized retail outlet which gives sales of more than 2000 case per annum. 11. Price and scheme information should be clear to retailer properly. 12.Company should sponsor major events. 13.Petrol Pumps, medical shop, marriage garden etc. should be targeted, as these are still the uncovered places where company can get the potential buyers. 14.Incentive should be given on each new outlet included by the market developer. This will motivate them (M.D.) to include new outlets at their route.
185

15. Supply verification card: It will be with retailer to ensure the order reaches to him in time with proper schemes and with appropriate pricing. 16.The retailer should have a record of the supply verification card that is with the retailers and also write down the schemes that he is giving. The shopkeeper will countersign in the delivery verification card and the scheme he got. 17. Separate schemes or offers should be given at regular intervals to create a new demand for the products. 18.The production of the products should be up to mark to avoid any shortage in supply. 19.In spite of the credit period of 30 days, the company should give the reminder to the retail outlets on every 25th day for the delivery of the check, so that it would not cause the problem during the time of delivery of the products. 20.Proper communication and co-ordination with the retail outlets is mandatory. 21.Activation is required at all the retail outlets. 22.Ensure fridges are always well stocked to maximize visibility. 23.Stock up on soft drinks at meal times when customers often need a non-alcoholic refreshment to complement their food. 24.Company should give new dealerships at a very large scale. 25.The brand Pepsi can improve its market share more by focusing on the after sales services. 26.We should develop a customer care centre focusing on relation development with retail outlets. 27.Our technicians are not available all the time for their services at our retail outlets. Sometimes it take too long to repair a Visi cooler and this defames the goodwill of the company. 28.We should focus on those outlets where Coke is having more market.

186

29.Placing Pepsi products in train like Palace on where, Rajdhani and Shatabdi express will facilitate the co-operative in promoting its products. 30.Relation between retailer and distributor should be maintaining by doing some cultural activities like quiz, nukkad natak. 31.Conduct consumer focused marketing programs which includes new promotion schemes, discounts, events, packaging etc.

187

MY EXPERIENCE WITH SMV BEVERAGES These eight weeks with SMV BEVERAGES are unforgettable for me. The experience, which I got during these days, was tremendous. I have made good relationship with so many people in frontline division & other division. Everybody over there I found nice & helping. I also made some good friends of other B-schools who were also management trainee there. I faced the odd situation in working life & got the adoption quality. The main thing I got from my project was how to interact with various people. Really, the experience I have got from my project will be very helpful to enrich and nourish my career.

JOB PROFILE
TASKS AND TARGETS: To survey the whole outlets of Pepsi situated at Jamshedpur. To know about the problems of the retailers related to supply. To merchandise the product of the company according companies portfolio (to create an efficient effective presentation of the product at the outlets). To know about the consumer perception about the brands of the company. To generate sales for the company. To check the availability of the products. To provide them display accessories for promotional activities. To provide them knowledge about the new schemes offered by the company for generating the sales. To observe and analyze the market policies adopted by sales department. Taking orders from the retailers, To give them information about the new display schemes of the company. To make the route map of the whole outlets of Pepsi company. To take the tag and serial no of the freezes of Pepsi company. To go with display campaigns. To find out the market share of Pepsi in Jamshedpur.. Running various shorts of promos at the time of any new product launch and schemes.

188

LEARNINGS
No doubt that a field work or training can change ones attitude and behavior. In between training course I have come to recognize my own potential and skills taking into mind my dreams. Which has given me a right platform to make my career in corporate sector, there I can utilize my skills and knowledge in a better way.
y

Planning and organizing: Planning about the given task and complete it within the time boundary and try to put optimum utilization of available resources in the work.

Customer Focus: Understanding the customer focus planning and respond them appropriate and satisfactory answer for making long term relationship with them.

Negotiations: How to build internal commitment and external credibility, through effective negation and suitable influencing styles based on a clear understanding of organizational decision making dynamics.

Team effectiveness: Ability to lead the team members and ability to get the work done from them.

Personality Development: Working under the guidance of Mr. Ravi bhaskar has been a rewarding experience threw picking up some charismatic points from his personality I tried to put on the customers. It enhances my confidence & presentations skills.

Achievement Orientation: Ambition to achieve the target within the given period enhances my capability and helps in to overcome obstacles and give outstanding result or outcomes.

Corporate Exposure: The achievements which I got from this training, will be helpful in my professional life by this I learnt how I can do smart work with minimum efforts.

I got a project which gave me the opportunity to meet the various people in the corporate world. I could understand the working culture of corporate. Before this I never visited such big organizations.

Making plan for the next day and finding the concern department and person allowed me to increase my communication ability, written as well as verbal.

My confidence to meet people has tremendously gone up. Today I have that much confidence that I can meet to any big person in any organization.
189

My boss also helped me very much to learn about corporate world. How to prepare the proposals and how to give the company offer all I learnt from my boss.

I also attended the customer demonstration which gave me the knowledge about how the customer can be convinced, how there queries are handled.

During my summer training I have learned much more about customer behavior. Its a practical experience, which will be beneficial in my near professional life.

190

ACHIEVEMENTS
I had a golden opportunity to utilize my valuable Seven weeks with SMV Bevearge (FOBO of PEPSICO). I got a great exposure of corporate from the people of company. I learned lots of things which may be useful in my career development. Firstly I got summer placement for enjoying my summer training from SMV Beverage (FOBO of PEPSICO) .It was good news for me. It was golden time to know the real corporate world. Before that I had only bookies knowledge about the organization, corporate and about the organization culture. It was the time when one can apply the theoretical knowledge for the practical purpose. On the basis of these practical knowledge I can perform better at the time of job .After the completion of my summer training I realized that without summer training , a management trainee is not complete. Before this training I didnt have idea about the organizational culture. But during my training period I learned a lot. Due to this I am really grateful to Mr.Arvind Tiwari (MDM), who gave this opportunity and Mr. Ravi Bhaskar (Customer Executive) and I am also grateful to Ishan Institute of Management &Technology from where I got this platform. If I talk about the achievement during the summer training then I have abundance of achievement .Firstly I would like to mention that before that particular training I didnt have share guts to face the corporate world. I was in little bit in confusion that, would I able to survive in corporate? It was a big question in my mind. But after this tanning I am sure that I will enjoy the corporate world in future. Regarding my second achievement I knew that how a fellow can apply theoretical knowledge in practical field. It is one of my important and prominent achievement for me .Because this is very important for the marketing fellow. If any person knows how to apply the theoretical knowledge in practical field he/she will definitely enjoy future life in their respective job, because
191

corporate or any other job requires practical knowledge. Unless we have practical knowledge we cant survive in the corporate world. I would like to mention my third achievement, I Got a chance to know more about PepsiCo and its competitor coke. My next achievement is to know that what should be the quality of real sales person. I analyzed their activity and behavior. That was one of the important and prominent learning and achievement for me. It will be very beneficial for me . I learnt, how to cop up the pressure and achieve target with smile. These one and half months with PepsiCo are unforgettable for me. The experience which I got during these days was tremendous. I have made good relation with so many people in frontline division where I did my project & other division. Everybody over there I found nice & helping. I also made some good friends of other B-schools who were also management trainee there. My next achievement is that, I learned to manage time management and work pressure and how to perform fixed work within a time limit. Really, the experience I have got from my project will be very helpful to enrich and nourish my career. I surveyed more number of outlets rather than given and generated the sales threw availability of the products inside the areas where transportation was not available (by making a small Distributor counter). and also generated sales threw founding new outlets

192

ANNEXURE QUESTIONNAIRE 1.) Do you purchase soft drink for your shop? a. Yes b. No

2.) Which soft drink would you like to purchase more in quantity a. PepsiCo b. Coca cola

3.) How many number of retail outlets are there in your locality? a. Pure .. b. Impure. c. Both

4) How many numbers of bottles are you selling per day?

Product Pepsi Mirinda 7up Dew Slice Lehar soda Tropicana

Less than 10

10-50

50-100

100-150

150-200

More than 200

Aqafina 5) Are you satisfied by the service given by the salesman? a. b. c. d. e. Very often Often Sometimes Rarely Never

6) What type of interaction you are having with salesman or companys man? a. Formal b. Friendly c. Rudely
193

7) How frequently salesman visit to your outlet? a. b. c. d. e. Every day or more 2-6 times in a week About once in a week Never Satisfaction level

8) Do you want to improve the service of the company? a. Yes b. No 9) Pick out the option as applicable. Always A, Many times-M, Sometimes-S, Rarely- R, Never-N A M S Satisfied with the companys product and quality Salesman easily changes your damaged or outdated stocks Companys man come at your counter regular Company man listens and solve your service related problems Provides you enough accessories Salesman take care of companys accessories Service of the company match with your expectations at the actual service Are you satisfied with the companys product and quality Are you satisfied with the scheme given along with the product R N

10) How describe the services at PepsiCo? (Each block contains 10% out of 100%) Efficient inefficient Fast slow Reliableunreliable

194

11) Please indicate how strongly you agree and disagree with th following statement about the companys service? Strongly disagree-SA, Agree-A, Somewhat agree- SWA, Disagree-DA, Strongly disagree- SD SA Meeting with salesman is creating healthy environment Availability of all type of products at a time Availability of products in sufficient quantity Enrolled you in companys various plan Solve your problem in very short time Change companys faculty accessories immediately 12) Do you want any improvements company in ? A SWA DA SD

Time management.. Service . Scheme . Interaction.. Name Address Type of outlet a. Exclusive cold drink shop b. stationary shop c. ice cream parlor d. general stores e. medical shops f. other

195

BIBLIOGRAPHY

BOOKS Author: Kotler Philip, Marketing Management, (The Millennium Edition) 10th Edition, February 2001, Publisher: Prentice Hall of India Pvt Ltd., New Delhi (Pages: 177-193, 195-214) MAGAZINES and REPORTS Coca-Cola Annual Report PepsiCo Annual Report Coca-Cola Environmental Reports Magazines(marketing management 4Ps) SEARCH ENGINS www.google.com www.yahoo.com WEBSITES www.thecoca-colacompany.com www.yahoofinance.com www.yahoomarketing.com www.pepsico.com www.pepsichannel.com www.Wikipedia.com

196

WORD OF THANKS
This project report is a result of endless effort & immense degree of toil. I would like to thank all those people who graciously helped me by sharing their valuable time, experience & knowledge. I would like to express heartiest thanks to Dr. D. K. GARG (Chairman), Mr. M. K. VERMA (Dean) and placement head Mr. T. K. GUHA for lending me their kind support for completion of my project. I thank all those who directly or indirectly supported me morally, financially and through providing knowledge by which I could complete my project as well as summer training. I thank to all those readers who will study this project in the future. Last but not the least I am thankful to the management of SMV Beverages Jamshedpur & especially to my guide Mr. Arvind tiwari (MDM) & My Co-Guide Mr. Ravi Bhaskar (CE) whose Co-operation and guidance was a milestone in completion of my project. Who influenced me to work positively at each step by giving his precious time to discuss and to provide relevant information and providing me co operation and cordial environment for making me comfortable during my stay in company.

197