identifying distribution gap and planning for route effi

A PROJECT REPORT ONIdentifying Distribution Gap And Planning For

Route Efficiency.HINDUSTAN COCA-COLA BEVAREGE VARANASI

As Partial Fulfillment for the award of MBA degree under

U.P.TechnicalUniversity, Lucknow 2005-07

Under the able guidance of:Mr. Virendra Dahia.

Submitted By:Ranjeet Kumar Asthana.

R.No. 0509870206

INSTITUTE OF MANAGEMENT STUDIESNOIDA

CERTIFICATE

TO WHOM IT MAY CONCERN

This is to certify that MR. RANJEET ASTHANA roll no.0509870206 of MBA is a

bonafide regular student of INSTITUTE OF MANAGEMENT STUDIES (IMS),

NOIDA for the session 2005-07.

He has completed the summer training project report entitled “IDENTIFYING

DISTRIBUTION GAP AND PLANING FOR ROUTE EFFICIENCY” In the

organization “HINDUSTAN COCA-COLA BEVAREGE PRIVATE LIMITED,

MEHNDINGANJ,RAJATALAB,VARANASI ” as a partial fulfillment for the award of

MBA degree under u.p.technical university,lucknow.

I find the research report is up to standard and original one.

Dr. C.S.NAGPAL

EXECUTIVE DIRECTORSS

CERTIFICATE

TO WHOM IT MAY CONCERN

This is to certify that MR.RANJEET ASTHANAI roll no.0509870206 of MBA is a

bonafide regular student of INSTITUTE OF MANAGEMENT STUDIES (IMS),

NOIDA for the session 2005-07.

He has completed the summer training project report entitled “IDENTIFYING

DISTRIBUTION GAP AND PLANING FOR ROUTE EFFICIENCY” In the

organization “HINDUSTAN COCA-COLA BEVAREGE PRIVATE LIMITED,

MEHNDINGANJ,RAJATALAB,VARANASI ” as a partial fulfillment for the award of

MBA degree under u.p.technical university,lucknow.

I find the research report is up to standard and original one.

Project Supervisor

VIRENDRA DAHIA

ACKNOWLEDGEMENT

The project work bears the imprint of several people. I have a deep sense of gratitude

and honor towards them. First of all I would like to pay my gratitude thanks to Mr.B.J.Rishi (Coordinator).I extend my thanks to my project supervisior Mr. Virendra Dahia.

I would also like to give my sincere thanks to Mr. Sharat Kumar (HR Manager) for

giving me an opportunity to work for their esteemed organization .

I would also like to give my special thanks to Mr. Gaurav Dhar Dubey (sales manager)

who helped me in completion of this training

And, at last but not the least I would like to thank all those distributors and retailers who

provided me necessary information of market and the current scenario and all those

people who are directly and indirectly involved in the project.

Ranjeet Asthana

PREFACE

It gives me an immense pleasure to put my project on “Identifying Distribution Gap

And Planning For Route Efficiency” with respect to coco-cola in varanasi . this is

made after a through study on specified marketing environment of working

atmosphere in Hindustan coca-cola Beverages Pvt. Ltd. Situated at Mehndiganj Raja

Talab, varanasi.

It is difficult for a common man to understand each and every aspect of the

organization. I have tried to present in an a lucid manner through the language of

common man so that every one may understand the complications of project have

been made in a clear by suitable data wherever necessary.

My study is based on the “Identifying Distribution Gap And Planning For Route

Efficiency”. as a lot of effort is made by the sales and marketing department to meet

out obligations apart from my project topic I have tried to chalk out almost every

department of the production plant.

In all my modesty, I wish to record here that a sincere attempt has been made for the

presentation this report. I also trust that this study will not only prove to be academic

interest but also will be able to provide an insight into the area of working in

multinational companies.

DECLARATION

I RANJEET KUMAR ASTHANA student ofINSTITUTE OF

MANAGEMENT STUDIES , NOIDA of MBA III semester, hereby,

declare that the summer training report having the title.Identifying

Distribution Gap & Planning for Route Efficiency in (LUXA,

DASASHAWAMEDH GHAT, BANGALI TOLA, RAMAPURA

RATHYATRA) Varanasi.There are several things, which are essential and

important.

It is outcome of my own work and the same has not been submitted to any

university\College\Institution for the award of my degree.

Date: RANJEET KUMARASTHANA

(MBA III Semester) Place:

EXECUTIVE SUMMARY

On 8th of June, I started my project under the guidance of Mr. Gaurav

dubey (Sales Manager) ,Mr. Ghanshayam Singh (Sales Executive) and Mr. Sivam

pan dey (marketing executive). I have covered all the area which come under

Krishana Enterprise and Om enterprise. The areas I covered are as follows:

Dasashawamedh Ghat, Bangali Tola, Bhelupura,Ramapura, Madanpura,

Luxa ,Rathayatra,Kamachha in Varansi city. I had surveyed many retail shops as

possible in the area assigned to me . There I found some positive as well as some

negative image of coke.

I had done two surveys , one was Each dealer survey and

another one was brand and pack availability survey for knowing distribution gap

and route efficiency. I had also filled 100 questionaires from the retailer related to

distribution of soft drink and preference towards soft drinks.

In Each Dealer Survey , I counted the types of channel from

where the cold drink was selling for examples like pan shops , tea stalls , general

stores , restaurant etc and also the average sale of the cold drinks at that shops.

Also we covered each and every retailers at every route and we had to check that all

the brands and packs of coke were available or not or which one was available.

Every where I found the shortage of 200ml and 500ml bottle which was in more

demand. At every route I found some problems related to shortage of brands and

problem of improper visit of company officers to the retailers. I think that another

soft drink like Pepsi was much more stronger inside the city because they give good

margin to the retailers that’s why the retailers prefer to sell Pepsi in comparison

with Coke . And the other problem was that the retailers getting product at cheaper

cost in comparison from what they were getting from distributors.

After completing the survey, I got one more opportunity from

the sales manager in the form of a Market Impact Team . The work of that team

was that the team went to every retailer for right execution daily and to convinced

to buy each and every brand of coke. In the right execution daily, we went to the

retailer and make the cooling system pure and in the brand order. The brand order

of coke is

1. Thumps up

2. Coca-cola

3. Sprite

4. Limca

5. Fanta

6. Mazza

. We arrange it with the norms of coke in daily. In M.I.T. we take

seven steps which are as following:

1. Check the out side signs

2. Make worm display

3. Grid to retailer

4. Check inside signs

5. Check and maintain the cooling agent of Coke

6. Take the order to the retailer and fulfill it

7. Tell him about your next visit and thanks him.

I have completed and submitted my project report on

7th August. In this organization, I learned more about the sales and the

behavior of the retailer and distributor.

DISTRIBUTION

Firm, Brand, and Product Line Objectives

Firm level objectives:  It is not enough to simply state a firm’s goal

as maximizing the present value of total profit since this does not

differentiate it from other firms and says nothing about how this

objective is to be achieved.  Instead, a business and marketing plan

should suggest how the firm can best put its unique resources to use

to maximize stockholder value.  A number of resources come into play

—e.g.,

Distinctive competencies—knowledge of how to manufacture,

design, or market certain products or services effectively;

Financial—possession of cash or the ability to raise it;

Ability and willingness to take risk;

The image of the firm’s brand;

People who can develop new products, services, or other

offerings and run the needed supports;

Running facilities (no amount of money is going to get a new

microchip manufacturing plant started tomorrow); and

Contacts with suppliers and distributors and others who influence

the success of the firm.

Market balance: It is essential that different firms in the same

business not attempt to compete on exactly the same variables.  If

they do, competition will invariably degenerate into price—there is

nothing else that would differentiate the firms.  Thus, for example, in

the retail food market, there are low price supermarkets such as Food

4 Less that provide few if any services, intermediate level markets like

Ralph’s, and high-end markets such as Vons’ Pavillion that charge high

prices and claim to carry superior merchandise and offer exceptional

service

Risk:  In general, firms that attempt riskier ventures—and their

stockholders—expect a higher rate of return.  Risks can come in many

forms, including immediate loss of profit due to lower sales and long

term damage to the brand because of a poor product being released or

because of distribution through a channel perceived to carry low

quality merchandise.

Brand level objectives: Ultimately, brand level profit centers are

expected to contribute to the overall maximization of the firm’s

profits.  However, when a firm holds several different brands, different

marketing and distribution plans may be required for each.  Several

variables come into play in maximizing value.  Profits can be

maximized in the short run, or an investment can be made into future

earnings.  Product profit can be measured in several ways.  If you sell a

computer that cost $950 to make for $1,000, you are making only a

5% gross profit.  However, selling a product that cost $5 to make for

$10 will result in a much higher percentage profit, but a much lower

absolute margin.  A decision that is essential at the brand level is

positioning.  Options here may range from a high quality, premium

product to a lower priced value product.  Note here that the same

answer will not be appropriate for all firms in the same market since

this will result in market imbalance—there should be some firms

perceiving each strategy, with others being intermediate.

Distribution issues come into play heavily in deciding brand level

strategy.  In order to secure a more exclusive brand label, for example,

it is usually necessary to sacrifice volume—it would do no good, for

Mercedes-Benz to create a large number of low priced automobiles. 

Some firms can be very profitable going for quantity where economies

of scale come into play and smaller margins on a large number of units

add up—e.g., McDonald’s survives on much smaller margins than

upscale restaurants, but may make larger profits because of volume. 

Some firms choose to engage in a niching strategy where they forsake

most customers to focus on a small segment where less competition

exists (e.g., clothing for very tall people). 

In order to maintain one’s brand image, it may be essential that

retailers and other channel members provide certain services, such as

warranty repairs, providing information to customers, and carrying a

large assortment of accessories.  Since not all retailers are willing to

provide these services, insisting on them will likely reduce the intensity

of distribution given to the product.

Product line objectives: Firms make money on the totality of

products and services that they sell, and sometimes, profit can be

maximized by settling for small margins on some, making up on

others. For example, both manufacturers and retailers currently tend

to sell inkjet printers at low prices, hoping to make up by selling high

margin replacement cartridges.  Here again, it may be important for

the manufacturer that the retailer carry as much of the product line as

possible.

Distribution Objectives

Interrelated objectives: A firm’s distribution objectives will

ultimately be highly related—some will enhance each other while

others will compete.  For example, as we have discussed, more

exclusive and higher service distribution will generally entail less

intensity and lesser reach.  Cost has to be traded off against speed of

delivery and intensity (it is much more expensive to have a product

available in convenience stores than in supermarkets, for example).

Narrow vs. wide reach: The extent to which a firm should seek

narrow (exclusive) vs. wide (intense) distribution depends on a number

of factors.  One issue is the consumer’s likelihood of switching and

willingness to search.  For example, most consumers will switch soft

drink brands rather than walking from a vending machine to a

convenience store several blocks away, so intensity of distribution is

essential here.  However, for sewing machines, consumers will expect

to travel at least to a department or discount store, and premium

brands may have more credibility if they are carried only in full service

specialty stores.

Retailers involved in a more exclusive distribution arrangement are

likely to be more “loyal”—i.e., they will tend to

 Recommend the product to the customer and thus sell large

quantities;

 Carry larger inventories and selections;

 Provide more services

Thus, for example, Compaq in its early history instituted a policy that

all computers must be purchased through a dealer.  On the surface,

Compaq passed up the opportunity to sell large numbers of computers

directly to large firms without sharing the profits with dealers.  On the

other hand, dealers were more likely to recommend Compaq since

they knew that consumers would be buying these from dealers.  When

customers came in asking for IBMs, the dealers were more likely to

indicate that if they really wanted those, they could have them—“But

first, let’s show you how you will get much better value with a

Compaq.”

Distribution opportunities:  Distribution provides a number of

opportunities for the marketer that may normally be associated with

other elements of the marketing mix.  For example, for a cost, the firm

can promote its objective by such activities as in-store

demonstrations/samples and special placement (for which the retailer

is often paid).  Placement is also an opportunity for promotion—e.g.,

airlines know that they, as “prestige accounts,” can get  very good

deals from soft drink makers who are eager to have their products

offered on the airlines.  Similarly, it may be useful to give away, or sell

at low prices, certain premiums (e.g., T-shirts or cups with the

corporate logo.)  It may even be possible to have advertisements

printed on the retailer’s bags (e.g., “Got milk?”)

Other opportunities involve “parallel” distribution (e.g., having

products sold both through conventional channels and through the

Internet or factory outlet stores).  Partnerships and joint promotions

may involve distribution (e.g., Burger King sells clearly branded

Hershey pies).

Deciding on a strategy.  In view of the need for markets to be

balanced, the same distribution strategy is unlikely to be successful for

each firm.  The question, then, is exactly which strategy should one

use?  It may not be obvious whether higher margins in a selective

distribution setting will compensate for smaller unit sales.  Here,

various research tools are useful.  In focus groups, it is possible to

assess what consumers are looking for an which attributes are more

important.  Scanner data, indicating how frequently various products

are purchased and items whose sales correlate with each other may

suggest the best placement strategies.  It may also, to the extent

ethically possible, be useful to observe consumers in the field using

products and making purchase decisions.  Here, one can observe

factors such as (1) how much time is devoted to selecting a product in

a given category, (2) how many products are compared, (3) what

different kinds of products are compared or are substitutes (e.g.,

frozen yogurt vs. cookies in a mall), (4) what are “complementing”

products that may cue the purchase of others if placed nearby. 

Channel members—both wholesalers and retailers—may have valuable

information, but their comments should be viewed with suspicion as

they have their own agendas and may distort information.

Direct Marketing

We consider direct marketing early in the term as a “contrast”

situation against which later channels can be compared.  In general,

you cannot save money by “eliminating the middleman” because

intermediaries specialize in performing certain tasks that they can

perform more cheaply than the manufacturer.  Most grocery products

are most efficiently sold to the consumer through retail stores that

take a modest mark-up—it would not make sense for manufacturers to

ship their grocery products in small quantities directly to consumers. 

Intermediaries perform tasks such as

moving the goods efficiently (e.g., large quantities are moved

from factories or warehouses to retail stores);

breaking bulk (manufacturers sell to a modest number of

wholesalers in large quantities—quantities are then gradually

broken down as they make their way toward the consumer);  

consolidating goods (retail stores carry a wide assortment of

goods from different manufacturers—e.g., supermarkets span

from toilet paper to catsup); and

adding services (e.g., demonstrations and repairs).

Direct marketers come in a variety of forms, but their categorization is

somewhat arbitrary.  The main thing to consider here is each firm’s

functions and intentions.  Some firms sell directly to consumers with

the express purpose of eliminating retailers that supposedly add cost

(e.g., Dell Computer).  Others are in the business not so much to save

on costs, but rather to reach groups of consumes that are not easily

reached through the stores.   Others—e.g., online travel agents or

check printers—provide heavily customized services where the user

can perform much of the services.   Telemarketers operate by making

the promotion in integral part of the process—you are explained the

benefits of the program in an advertisement or infomercial and you

then order directly in response to the promotion.  Finally, some firms

combine these roles—e.g., Geico is a customizer, but also claims, in

principle, to cut out intermediaries.

There are certain circumstances when direct marketing may be more

useful—e.g., when absolute margins are very large (e.g., computers) or

when a large inventory may be needed (e.g., computer CDs) or when

the customer base is widely dispersed (e.g., bee keepers).

Direct marketing offers exceptional opportunities for segmentation

because marketers can buy lists of consumer names, addresses, and

phone-numbers that indicate their specific interests.  For example, if

we want to target auto enthusiasts, we can buy lists of subscribers to

auto magazines and people who have bought auto supplies through

the mail.  We can also buy lists of people who have particular auto

makes registered.

No one list will contain all the consumers we want, and in recent years

technology has made it possible, through the “merge-purge” process,

to combine lists.  For example, to reach the above-mentioned auto-

enthusiasts, we buy lists of subscribers to several different car

magazines, lists of buyers from the Hot Wheels and Wiring catalog, and

registrations of Porsche automobiles in several states.  We then

combine these lists (the merge part).  However, there will obviously be

some overlap between the different lists—some people subscribe to

more than one magazine, for example.  The purge process, in turn,

identifies and takes out as many duplicates as possible.  This is not as

simple task as it may sound up front.  For example, the address “123

Main Street, Apartment 45” can be written several ways—e.g., 123

Main St., #123, or 123-45 Main Str.   Similarly, John J. Jones could also

be written as J. J. Jones, or it could be misspelled Jon J. Jonnes. 

Software thus “standardizes” addresses (e.g., all street addresses

would be converted into the format “123 Main St #45” and even uses

phonetic analysis to identify a likely alternative spelling of the same

name.

Response rates for “good” lists—lists that represent a logical reason

why consumer would be interested in a product—are typically quite

low, hovering around 2-3%.  Simply picking a consumer out of the

phone-book would yield even lower responses—much less than one

percent.  Keep in mind that a relevant comparison here is to

conventional advertising.  The response rate to an ad placed in the

newspaper or on television is usually well below one percent

(frequently more like one-tenth of one percent).  (More than one

percent of people who see an ad for Coca Cola on TV will buy the

product, but most of these people would have bought Coke anyway, so

the marginal response is low).

Electronic Commerce

 Online marketing can serve several purposes:

Actual sales of products—e.g., Amazon.com.

 Promotion/advertising:  Customers can be quite effectively

target in many situations because of the context that they,

themselves, have sought out.  For example, when a consumer

searches for a specific term in a search engine, a “banner” or

link to a firm selling products in that area can be displayed.  Print

and television advertisements can also feature the firm’s web

address, thus inexpensively drawing in those who would like

additional information.

Customer service:  The site may contain information for those

who no longer have their manuals handy and, for electronic

products, provide updated drivers and software patches.

Market research:  Data can be collected relatively inexpensively

on the Net.  However, the response rates are likely to be very

unrepresentative and recent research shows that it is very

difficult to get consumers to read instructions.  This is one of the

reasons why the quality of data collected online is often suspect.

There are many obstacles to the growth of e-commerce:

Reach:  Although the majority of U.S. households now have

computers connected to the Internet, a very large minority does

not, and penetration rates are considerably lower in some

countries.  In foreign countries, even those households that have

computers may be reluctant to spend time online due to the per

minute charges, which discourage the more leisurely “browsing”

American style. 

Concerns about privacy:  A number of consumers are concerned

about giving up information to marketers that can easily be

collected electronically.  Naturally, few consumers would like

information about their medical status widely collected by firms,

but many consumers are even reluctant to have marketers know

the ages of their children and past book purchase records.  R

eputational issues:  Although not as much as a problem before,

firms operating online or through direct mail have often been

viewed with suspicion since consumers may question whether

they will be around if they do not deliver satisfactorily.   

Transshipments:  Although the Internet should facilitate

commerce across boarders, customers paperwork and

ambiguities in duty liability make shipments across countries

burdensome.    

Costs.  During the “boom,” Internet firms were not expected to

be efficient and thus developed bad habits.  Although shipping

and handling charges can help cover costs of shipping and

administration, these often take away the attractiveness of

Internet shopping.  The most successful e-commerce firms turn

out to be the ones that have been successful doing other kinds of

direct marketing (e.g., catalog sales) before and have developed

the discipline and efficiency required there.   For products that

have relatively high absolute margins—e.g., computers—there is

more money to cover administrative costs.   

Language.  Since the Internet reaches around the world, it is

often difficult to match viewers with their preferred languages. 

Because U.S. firms and individuals tended to predominate among

those first to occupy the Web, most sites are in U.S. English. 

British speakers of English generally do not perceive American

English as American—they tend to perceive spelling such as

“color” rather than their “colour” as misspellings.  French

consumers do not like to have to click to get from an English

language to a French language site.  It is estimated that by the

year 2007, the majority of web surfers will not be comfortable in

English and will want sites in their own languages. 

Government regulations:  In the U.S.,  the government has tried

to keep its hands off the Net as much as possible to foster its

growth as a trade area, and a recently expired moratorium on

new sales taxes was even instituted.  However, governments in

many other countries are more forceful in their regulations.  In

countries such as China, where sites can be used to spread

“subversive” ideas, there is a great deal of government scrutiny

and suspicion.    

Cultural obstacles are often severe.  The whole purpose of the

web is to make information readily available.  In countries where

information is closely guarded, that is a frightening idea.  There

is often also a desire for personal interaction, which may be

required to establish the trust needed to secure a deal.     

Payment issues.  U.S. consumers exposed to credit card fraud

have very limited liabilities, but these protections do not exist to

the same extent in Europe or Asia.  In China, much of the

purpose of the Internet is defeated with some 80% of

transactions being completed off-line, usually with funding

instruments other than credit cards. 

There are a number of problems in running and developing web sites. 

First of all, the desired domain name may not be available—e.g.,

American Airlines could not get “American.com” and had to settle for

“AmericanAir.com.”  There is also a question having your site identified

to potential users.  Research has found that most search engines have

a great deal of “false hits” (sites irrelevant that are identified in a

search—e.g., information about computer languages when the user

searches for foreign language instruction) and “misses” (sites that

would have been relevant but are not identified).  It is crucial for a firm

to have its site indexed favorably in major search engines such as

Yahoo, AOLFind, and Google.  However, there is often a constant

struggle between web site operators and the search engines to

outguess each other, with the web promoters trying to “spam” the

search engines with repeated usage of terms and “meta tags.”  The

fact that many computer users employ different web browsers raises

questions about compatibility.  A major problem is that many of the

more recent, fancier web sites rely on “java script” to provide

animation and various other impressive features.  These animations

have proven very unreliable.  Sites may “crash” on the user or prove

unreliable, and many consumers have found themselves unable to

complete their transactions.

Legal issues.  There are a number of legal issues associated with the

Internet:

Reach across boarders.  Web sites transcend country lines and

thus, a firm may be subjected to legal standards of different

countries.  It may be difficult to create advertising that

simultaneously complies with rules for each country. 

 Taxation:  There is a great deal of ambiguity as to which state

and local governments may collect taxes on merchandise sold on

the Internet.  There is also a question as to who has the

responsibility for making the payment—the seller or the buyer? 

 Privacy issues.  Many foreign governments prohibit the

collection of personal information of consumers (as Amazon.com

does), which greatly reduces the customization opportunities

online.

Web site design:  The web designer must make various issues into

consideration:

Speed vs. aesthetics:  As we saw, some of the fancier sites have

serious problems functioning practically.  Consumers may be

impressed by a fancy site, or may lack confidence in a firm that

offers a simple one.  Yet, fancier sites with extensive graphics

take time to download—particularly for users dialing in with a

modem as opposed to being “hard” wired—and may result in site

crashes. 

Keeping users on the site:  A large number of “baskets” are

abandoned online as consumers fail to complete the “check-out”

process for the products they have selected.  One problem here

is that many consumers are drawn away from a site and then are

unlikely to come back.  A large number of links may be desirable

to consumers, but they tend to draw people away.  Taking

banner advertisers on your site from other sites may be

profitable, but it may result in customers lost. 

 Information collection:  An increasing number of consumers

resist collection of information about them, and a number of

consumers have set up their browsers to disallow “cookies,” files

that contain information about their computers and shopping

habits.

Cyber-consumer behavior:  In principle, it is fairly easy to search

and compare online, and it was feared that this might wipe out all

margins online.  More recent research suggests that consumers in fact

do not tend to search very intently and that large price differences

between sites persist.  We saw above the problem of keeping

consumers from prematurely departing from one’s site.

Legal Issues 

Distribution issues raise significant legal questions, many of which

relate to antitrust law.  The main purpose of antitrust law is to enforce

fair competition among firms.  There are two different kinds of

competition that are relevant here.  Interbrand competition refers to

different brands that compete against each other—e.g., Nike competes

against Reebok.  On the other hand, intrabrand competition refers to

competition between different channels that sell the same branded

goods—e.g., Footlocker competes against other retailers that sell Nike

products.  Often, it may be necessary to sacrifice the one kind of

competition to bolster the other.  For example, by introducing

exclusive territories given to some retailers who alone are given the

right to sell in one geographic area, these retailers may have extra

incentive to “push” the product.  The theory here, then, is that by

reducing the intrabrand competition among retailers all carrying, say,

Guess jeans, the retailer will be motivated to put up a strong

competition against other retailers who carry Levi’s, thus enhancing

interbrand competition.

There are a number of ways in which competition can be threatened:

Collusion:  Retailers and/or manufacturers get together and

agree to limit competition—e.g., the three laundromats in a small

town all get together and agree that no one will charge less than

one dollar per wash.  Although blatantly illegal in the United

States, this kind of behavior is accepted in certain parts of the

world, although European countries are now beginning to be less

tolerant. 

Discriminatory pricing:  Some full service manufacturers may

decide to give better deal to more powerful buyers—e.g., Wal-

Mart may negotiate better prices than Joe’s Grocery Store can. 

Such differences in prices paid by competing firms are generally

legal only if they are justified by actual cost savings in selling to

the two different firms—obviously, the average overhead per

case of Bandaid will be much lower when selling to Wal-Mart,

which buys in huge quantities.

Predatory pricing:  Firms may attempt to temporarily sell

products below their costs so that competitors are driven out of

business, after which the predators will raise their own prices. 

This is generally illegal in the U.S.

Territorial restrictions (as discussed above) and customer

coverage restrictions (e.g., one firm is designated as the only

firm that is allowed to sell to hospitals, while another one may be

designed the sole authorized seller to gyms).  These may or may

not be legal, depending on the courts’ interpretation of their

impact on overall market competition.

 Price maintenance.  Manufacturers may put pressure on

retailers not to sell their products below or above a certain price. 

While certain manufacturers are concerned that some

distributors may take advantage of exclusive distribution deals

and set maximum prices, the greatest concern is about minimum

prices.  Here, manufacturers may be concerned that if price

competition is too intense, services will suffer. By trying to

ensure that no one sells below a designated floor price, full

service retailers are guaranteed certain levels of profitability. 

Generally, it is explicitly illegal for retailers and manufacturers to

agree not to sell below a certain price (in legal terms, that would

be a “conspiracy in restraint of trade).  However, it frequently is

legal for the manufacturer to tell the retailer that if he or she

sells below the price, the manufacturer will stop him or her.  It

would be illegal, however, for the manufacturer to promise

another competitor to “cut off” the offending retailer.

Tying:  Here, a customer may be required to buy two products

even if he or she only wants one.  Firms may want to engage in

this activity if they have a monopoly-like situation for one

product but face competition for another (e.g., Intel dominates

the market for the newest chips but has much more competition

for the motherboards and modems that the firm also produces. 

Thus, the firm might like to buyers of their newest CPUs to also

buy motherboards also.  Tying is legal under some circumstances

when it is deemed to be reasonable (the customer cannot expect

to be able to buy a car without tires even if he or she can find

cheaper alternatives elsewhere) but can be illegal if it is abusive

and serves no legitimate purpose (as in the Intel case).

Antitrust law is often rather murky, and it may be hard to find a

straight answer as to whether something is legal or not.  In general,

courts have classified various kinds of activities in categories of

varying certainty of legality or illegality.  Per se illegality includes

practices that are definitely illegal if it can be proven that they have

taken place (e.g., two retailers agreeing not to sell below certain

prices).  Under the modified rule of reason, certain practices are

presumed to be illegal, but the courts will hear exculpatory evidence

which may clear a firm (e.g., courts are likely to be suspicious if a

supplier drops a discount retailer after receiving complaints from a full

service retailer, but if the manufacturer can prove that it did not agree

with the full service retailer to stop the supply and that the termination

benefits interbrand competition, the practice may be accepted).  Under

the rule of reason, the totality of circumstances are examined to

assess impact on competition, and a decision is made—thus, the law is

not as clear (e.g., whether tying—requiring a consumer to buy two

products even if he or she wishes to buy only one—is subject to

significant review).  Finally, certain practices are per se legal—i.e., they

are accepted as legal and no legal action can be taken (e.g., since

consumers do not compete against each other, it is legal to charge

different airline passengers different fares based on advance purchase

and Saturday night stayovers).

Service Outputs

As we have discussed earlier, firms have to make tradeoffs between

different considerations such as cost of distribution, intensity vs.

exclusivity, and service provided.  Some of the services ultimately

desired by consumers include bulk-breaking (as previously discussed),

spatial convenience (being able to buy milk in the supermarket rather

than having to drive out to a farmer to get it), timing of availability

(having someone—the retailer and other channel members—plan to

have toothpaste available in the store when the consumer needs it),

and providing a breadth of assortment (the same store will carry

different kinds of food and other merchandise from different suppliers.

Segmentation involves identifying groups of consumers who respond

relatively similarly to different treatments.  In general, we want to find

segments that contain people who are as similar as possible to each

other while, simultaneously, being as different as possible from

members of other segments.  Thus, for example, members of what we

might term a price sensitive food segment are likely to seek out the

lowest priced retailers even if they are not located conveniently, buy

larger packages, switch brands depending on what is on sale, and cut

coupons.  The “fussy” segment, in contrast, may shop either where the

best quality is found or at the most convenient location, and may be

brand loyal and not cut coupons.  Note that not all members of each

segment will be completely alike, and there is some tension between

precision of description and cutting the segments into too small

pieces.  The idea, here, then, is for different channels to serve different

consumers (e.g., price sensitive individuals are targeted by Food 4

Less while more upscale stores target the price insensitives).

Channel Structure and Membership Issues

Paths to the customer. For most products and situations, it is

generally more efficient for a manufacturer to go through a distributor

rather than selling directly to the customer. This is especially the case

when consumers need to have variety and assortment (e.g., consumer

would like to buy not just toothpaste but also other personal hygiene

products, and even other grocery products at the same place), when

products are bought in small volumes or at low value (e.g., a candy bar

sells for less than $1.00), or even intermediaries have skills or

resources that the manufacturer does not (a sales force, warehousing,

and financing). Nevertheless, there are situations when these

conditions are not met—most typically in industrial settings. As an

extreme case, most airlines are perfectly happy only being able to buy

aircraft and accessories from Boeing and would prefer not to go

through a retailer—particularly since the planes are often highly

customized. More in the "gray" area, it may or may not be appropriate

to sell microcomputers directly to consumers rather than going

through a distributor—the costs of providing those costs may be

roughly comparable to the margin that a distributor would take.

Potential channel structures. Channel structures can assume a

variety of forms. In the extreme case of Boeing aircraft or commercial

satellites, the product is made by the manufacturer and sent directly to

the customer’s preferred delivery site. The manufacturer, may,

however, involve a broker or agent who handles negotiations but does

not take physical possession of the property. When deals take on a

smaller magnitude, however, it may be appropriate to involve retailer--

but no other intermediary. For example, automobiles, small planes,

and yachts are frequently sold by the manufacturer to a dealer who

then sends directly to the customer. It does not make sense to deliver

these bulky products to a wholesaler only to move them again. On the

other hand, it would not make sense for a California customer to fly to

Detroit, buy a car there, and then drive it home. As the need for variety

increases, a wholesaler may then be introduced. For example, an office

supply store needs to sell more merchandise than any one

manufacturer can produce. Therefore, a wholesaler will buy a very

large quantity of binders, file folders, staplers, reams of paper, glue

sticks, and similar products and sell this in smaller quantities—say 200

staplers at a time—to the office supply store, which, in turn, may go to

another wholesaler who has acquired telephones, typewriters, and

photocopiers. Note that more than one wholesaler level may be

involved—a local wholesaler serving the Inland Empire may buy from

each of the two wholesalers listed above and then sell all, or most, of

the products needed by local office supply stores. Finally, even in

longer channels, agents or brokers may be involved. This, in particular,

will happen when the owner of a small, entrepreneurial company has

more experience with technology than with businesses negotiations.

Here, the manufacturer can be freed, in return for paying the agent,

from such tasks, allowing him or her to focus on what he or she does

well.

Criteria in selecting channel members. Typically, the most

important consideration whether to include a potential channel

member is the cost at which he or she can perform the required

functions at the needed level of service. For example, it will be much

less expensive for a specialty foods manufacturer to have a wholesaler

get its products to the retailer. On the other hand, it would not be cost

effective for Procter & Gamble and Wal-Mart to involve a third party to

move their merchandise—Wal-Mart has been able to develop, based on

its information systems and huge demand volumes, a more efficient

distribution system. Note the important caveat that cost alone is

not the only consideration—premium furniture must arrive in the

store on time in perfect condition, so paying more for a more

dependable distributor would be indicated. Further, channels for

perishable products are often inefficiently short, but the additional cost

is needed in order to ensure that the merchandise moves quickly. Note

also that image is important—Wal-Mart could very efficiently carry

Rolex watches, but this would destroy value from the brand.

"Piggy-backing." A special opportunity to gain distribution that a

manufacturer would otherwise lack involves "piggy-backing." Here, a

manufacturer enlists another manufacturer that already has a channel

to a desired customer base, to pick up products into an existing

channel. For example, a manufacturer of rhinoserous and

hippopotamus shampoo might be able to reach zoos by approaching a

manufacturer of crocodile teeth cleaning supplies that already reaches

this target. In the case of reciprocal piggy-backing, the shampoo

manufacturer might then, in turn, bring the teeth cleaning supplies

through its existing channel to exotic animal veterinarians.

Parallel Distribution. Most manufacturers find it useful to go through

at least one wholesaler in order to reach the retailer, and it is simply

not efficient for Colgate to sell directly to pathetic little "mom and pop"

neighborhood stores. However, large retail chains such as K-Mart and

Ralph’s buy toothpaste and other Colgate products in such large

volumes that it may be efficient to sell directly to those chains. Thus,

we have a "parallel" distribution network whereby some retailers buy

through a distributor and others do not. Note that we may also be

tempted to add a direct channel—e.g., many clothing manufacturers

have factory outlet stores. However, note that the full service retailers

will likely object to being "undercut" in this manner and may decide to

drop or give less emphasis to the brand. It may be possible to minimize

this contract by precautions such as (1) having outlet stores located in

vacation areas not within easy access of most people, (2) presenting

the merchandise as being slightly irregular, and/or (3) emphasizing

discontinued brands and merchandise not sold in regular stores.

Evaluating Channel Performance. The performance of channel

members should be periodically monitored—a channel member may

have looked attractive earlier but may not, in practice be able to live

up to promises. (This can be either because of complacency or

because the channel member simply did not realize the skills and

resources needed to perform to standards). Thus, performance level

(service outputs) and costs should be evaluated. Further, changes in

technology or in the market place may make it worthwhile to shift

certain functions to another channel member (e.g., a distributor has

expanded its coverage into another region or may have gained or lost

access to certain retail chains). Finally, the extent to which

compensation is awarded in proportion to performance should be

reassessed—e.g., a distributor that ends up holding inventory longer or

taking on more returns may need additional compensation.

STATEMENT OF THE PROBLEM

DISTRIBUTION GAP

Distribution Gap is that posed by the limits on the distribution of the product or services .

If it is limited to certain geographical regions, as some draught beers are, it cannot expect

to make sales in other regions. At the other end of the spectrum, the multinationals may

take this to the extremes of globalization. Equally, if the product is limited to certain

outlets, just as some categories of widely advertised drugs are limited by law to

pharmacies, then other outlet will not be able to sell them. A more likely outcome is that

percentage of distribution limited. The remedy for this is simply to maximize distribution,

Unfortunately, maximizing distribution is not quite as it sounds, except for the obvious

market leaders. It is true that additional sales force effort, backed by suitable sales

promotional activities, should be able to increase distribution somewhat, although there

will still have to be some balance between the benefits to be gained and the cost to be

incurred. But the prime barrier to distribution will probably be the resistance of the

distribution chains to stock anything other than the best seller. This can partially be

overcome in the short term by offering better terms and higher margin, so that the

distributor make more on each sale. But the distributors have since learned that their

biggest profit come from concentrating on the main brands. They, above all, by the 80:20

rule

COMPETITIVE GAP

What is left represents the gap resulting from the competitive performance. This

competitive gap is the share of business achieved among similar products, sold in the

same market segment , and with similar distribution patterns – or at least, in any

comparison, after such effects have been discounted. Needless to say, it is not a factor in

the case of monopoly provision of services by the public sector.

The competitive gap represents the effect of factors such as price and promotion, both the

absolute level and the effectiveness of its messages. It is what marketing is popularly

supposed to be about.

 Gap Analysis

Market Deficiencies. "Gap" analysis involves analyzing current market

offering to assess the extent to which they meet customer demands. Demand side gaps

involve a market situation where consumers are not satisfied buying what is available—

usually either because the level of service provided is not adequate or because the

offering is too expensive. Supply side gaps, in contrast, involve firms that provide

services that are needed, but ones that can be met elsewhere at lower prices.

Demand Side Gaps. Customer satisfaction abounds, and many consumers

would like to replace their current suppliers. This can happen either generally—there is a

widespread dissatisfaction with banks among consumers, and many would switch if they

found one that they thought to provide better service—or the gap can be with one

segment that is not being well served. As an example of the latter, consider parents who,

if they had not had children, would have been perfectly satisfied with an ordinary Internet

service provider but are now worried that their children can be exposed to inappropriate

material online. Therefore, the PAX Network, which features family-oriented television

programming, stepped in to offer a service that claims to block out most objectionable

sites. Further, one auto parts store owned by a woman ran an advertising campaign aimed

at women, acknowledging that women were often being asked by their husbands and

boyfriends to be "parts runners." The ad then went on to talk about the cleanliness of the

store and non-condescending attitudes of the sales people.

Note that although a gap may exist in the sense that existing firms are not

offering what consumers may ideally want, there is a limit to what buyers would be

willing to pay for. For example, before starting their ice-cream business, Ben and Jerry

considered going into business delivering the New York Times to people’s doors on

Sunday mornings along with fresh baked bagels. A problem here, however, could have

been the cost of this service. Sometimes, a firm may be able to come in and fill a gap, but

may need to compromise on exactly how far to go. There are usually some struggles

between what would be nice to have and what customers are wiling to pay for.  For

example, many computer buyers would like to have someone come and set up the

computer, the peripherals, and the Internet connection, but might balk at paying $150 for

this service.  Many consumers would like to have their dry cleaning picked up and

delivered, but when push comes to shove, they would not be willing to pay for the extra

service.

In the early 1990s, a firm owning several supermarket chains decided start

Tiangues, a chain aimed at Hispanic consumers in Southern California.  Employees were

screened to be fluent in both Spanish and English, and foods that would appeal especially

to different Hispanic groups were emphasized.  The chain was very popular when it first

opened, but it soon lost market share as it was found that with time, what mattered most

to customers was low prices.

Wheel of Retailing. An interesting phenomenon that has been

consistently observed in the retail world is the tendency of stores to progressively add to

their services. Many stores have started out as discount facilities but have gradually

added services that customers have desired. For example, the main purpose of shopping

at establishments like Costco and Sam’s Club is to get low prices. These stores have,

however, added a tremendous number of services—e.g., eye examinations, eye glass

prescription services, tire installation, insurance services, upscale coffee, and

vaccinations. To the extent these services can be added in a cost effective manner, that is

a good thing. Ironically, however, what frequently happens is that "room" now opens up

for a "bare bones" chain to come in and fill the void that the original store was supposed

to have filled! New stores can now come in and offer lower prices before additional,

costly services "creep" in.  Note that upscaling over time may be an appropriate strategy

and that the owner of the "rising" chain may itself want to start another, lower-service

division (e.g., Ralph’s may want to own another chain such as Food 4 Less).

Supply Side Gaps. Supply side gaps come about when a business finds

that the services that it has traditionally offered to customers in the past are now too

expensive to justify the value they provide. For example, in the "old days" (i.e., until the

early 1990s), travel agents provided a valuable service—they would "match" travelers

and airlines, finding a reasonable fare and travel time and issuing the ticket to the

customer who, then, did not have to call all the airlines for a fare and then visit the airport

or an airline office. However, nowadays, it is much more convenient for consumers to

carry e-tickets, and it is frequently easier to go online to compare fares and travel time at

one’s convenience. Therefore, travel agents, to command their commissions, will often

need to provide something extra that the online services cannot. The problem is that, for

most consumers, there just isn’t much that the travel agent can offer other than fancy

coffee or donuts, which you can get more conveniently elsewhere anywhere. Maybe they

can take passport photos or arrange bus transportation to a cruise ship, but is that enough

to justify people coming to them? Online services are starting to offer package deals—air

fare, hotel, and car rental—anyway.

Finding opportunities. Again, it is important to emphasize the need for

market balance. Frequently, there will be room for higher cost services for one segment,

and perhaps a diametrically opposed service for the lower cost service.

Gaps, costs, and performance. Generally, we find that gaps do not exist

when cost and service are "in line" with customer expectations. Thus, for example,

Nordstrom serves a segment that desires high service. Nordstrom incurs a great deal of

costs in this, which are ultimately passed on to the consumer, but Nordstrom’s customers

are willing to pay for this. Similarly, Wal-Mart provides some, but less, service and does

so at a very low cost. Thus, another segment’s preferences are served. Thus, service

output demand is matched with supply. On the other hand, many auto repair facilities

provide less service than is expected and do not adequately make up for this by low

prices. Therefore, an opportunity might exist for someone to offer better service at a not

much higher cost. On the other hand, nowadays people may not be willing to pay the

extra cost for going to a butcher shop and pay significantly more if what they get is only a

little better than what is available in the supermarket meat section.

Closing gaps. Firms may be able to close, or reduce, their gaps by

reconsidering their offerings. A gasoline station that offers an "average" level of service

at prices higher than those of self-service stations might either target the low cost

segment, lowering prices and cutting costs, or targeting a premium service and "beefing

up" service. Similarly, a firm that faces a segmented market might "branch off" into

different units that offer different levels of service to different customers. For example,

Toyota started the Lexus division for consumers who demanded more service than would

have been cost effective to offer to its traditional customers. On the supply side, closing

gaps mostly involves improving efficiency and/or reducing costs in other ways.

Alternatively, existing channels may be reassessed—e.g., airlines have deemphasized

travel agents.

Channel Management and Conflict

Vertical integration. Generically speaking, products may come and reach

consumers through a chain somewhat like this:

Raw materials ---> component parts ---> product manufacturing

---> product/brand marketing ---> wholesaler ---> retailer

---> consumer

Money can be made at each stage in the chain and it may be tempting for

firms to try to get into all aspects. For example, Henry Ford wanted to make all the

components for his own cars, so Ford tried to run its own rubber plantation with limited

success. The temptation to try to expand vertically can be especially strong when an

industry faces limited growth and thus presents limited opportunities for reinvestment

into traditional operations (e.g., if the auto industry is not growing as much as desired,

one way to reinvest profits, rather than having to pay them back to stockholders who

would then have to pay taxes on the dividends, might be to buy steel mills. The problems,

however, is that the management is not used to running such businesses and that

managerial time will be spread among more areas.

Business structures. A business can be squarely focused in just one area

—e.g., Kentucky Friend Chicken is only in the fast food business and prides itself on this.

On the other hand, certain businesses are part of an assortment of businesses that all have

common, or at least overlapping, membership. Sometimes, these businesses can be

related in some way—for example, Pepsico used to own several restaurant fast food

chains, and Microsoft, in addition to being in the software business, used to own Expedia,

the online travel service. Here, expertise and brand equity might be transferred from

businesses to business. In other situations, however, these "empires" may consist of

unrelated businesses that were bought not so much because they "fit" into management

expertise, but rather because they were for sale when the conglomerate had money to

invest. With the tobacco industry currently being relatively profitable but having a

questionable future, a tobacco firm might invest in a software maker. Generally, such

investments are risky because of problems with management oversight. In Japan, many

firms are part of a keiretsu, or a conglomerate that ties together businesses that can aid

each other. For example, a keiretsu might contain an auto division that buys from a steel

division. Both of these might then buy from a iron mining division, which in turns buys

from a chemical division that also sells to an agricultural division. The agricultural

division then sells to the restaurant division, and an electronics division sells to all others,

including the auto division. Since the steel division may not have opportunities for

reinvestment, it puts its profits in a bank in the center, which in turns lends it out to the

electronics division that is experiencing rapid growth. This practice insulates the

businesses to some extent against the business cycle, guaranteeing an outlet for at least

some product in bad times, but this structure has caused problems in Japan as it has failed

to "root out" inefficient keiretsu members which have not had to "shape up" to the rigors

of the market.

Motivations for outsourcing. While firms, as discussed above, often have

certain motivations for trying to "gobble" up as many business opportunities as possible,

there are also reasons for "outsourcing" or contracting out certain functions to others.

Auto makers, for example, have often found it profitable to buy a number of components

from non-union manufacturers. Often small vendors, run by entrepreneurs, are better

motivated to perform certain services—e.g., insurance agents can have an incentive to

build up and service a client base more effectively than an internal staff could. It is also

possible for outsiders to specialize—chemical firms, for example, may be better able to

research and develop paints than auto manufacturers. Smaller independent firms may also

operate more leanly, facing market competition better than large, centralized firms. A

firm specializing in just making nuts and bolts may have greater economies of scale than

Rolls Royce, which makes only a limited number of cars.

Channel Power. Some channel members need others more than others

need them. For example, Wal-Mart has a lot more power, given its large volume

purchases, than many of its suppliers. There are several sources of power. Reward power

involves a channel member being able to positively reinforce another’s performance—

e.g., Coca Cola may be able to give a price break or pay a fee for additional shelf space.

A retailer that meets a certain goal—e.g., the sale of 50,000 cases per month—may

receive a bonus. In contrast, coercive power involves the threat of a punishment. A large

retailer, for example, may tell a small manufacturer that no further orders will be

forthcoming unless a price discount is offered. Expert power includes knowledge. Wal-

Mart, for example, because of its heavy investment in information technology, can

persuasively argue about likely sales volumes at different price levels. "Legitimate"

power involves government or other regulations—e.g., auto dealers have a great deal of

power over auto makers because only they are allowed to sell to end customers in the

continental U.S. under most circumstances. Finally, referent power involves the desire of

the other side to be associated—most manufacturers of upscale merchandise are highly

motivated to ensure their availability at Nordstrom’s.

Channel conflict. We have seen throughout the term that conflict exists

between channel members. For example, Coca Cola would like to increase its sales by

offering a discount on its cans. However, the retailer knows that overall soda sales will

not go up much when Coke is put on sale—consumers who bought other brands will just

switch, for the most part. Therefore, the retailer might like to "pocket" any discount that

Coke offers. Similarly, Bass might like to increase its sales by selling to Costco, but its

full service retailers will object to this competition. A number of approaches to resolution

are available, but none are perfect. Sharing of information may help build trust, but this

can be expensive, cumbersome, and may result in this information being available to

competitors. The two sides might seek outside mediation, with a supposedly neutral party

suggesting a fair solution, or the two sides may try to compromise on their own. One side

may accommodate the other, but may not be motivated to continue to do so in the future,

or the other may try to coerce its way through threats of punishment.

Distribution gap and route efficiency in Varanasi

Distributors in Varanasi :

There are 14 distributor in varanasi city

Distributor under whom I worked

1 Krishna

Shivam

Pawan

We can take the example of Krishna. it covers the following route

Luxa- Dushawamegh- Bangalitola- Nai-sarak- Lehartara – Sarswati phatak

There are around 350 outlets on this route . in which there are 50 RED outlets.

There are 15 vehicles for distribution one can store around 50 crates each time

and this is sufficient for carrying on the distribution process.

For the coverage of 350 outlets the agency has,

Vikram-2

Auto Rickshaw -4

Mahindra geep-1

Trolley 8

The agency has around 8-10 efficient salesman to cover the above mentioned

route.

WHAT IS RED ?RED (Right Execution Daily) RED outlets are those who sell the product during off-

Season (July-February)

80% sales are given by RED outlet which is 20% of whole outlet.

WHY DO WE DO RED SCORING?

1. Company classify the outlet into four categories via.,

1. Diamond outlets– they are those outlets which sell above 800 crates

2. Gold outlets – they are those outlets which sell above 500-799 crates.

3. Silver outlets - they are those outlets which sell 200-499 crates.

4. Bronze outlets – they are those outlets which sell up to 200 crates.

2. On the basis of RED scoring discount and schemes are allotted every year.

To know the performance of market developers (M.D.)

RED is done with the help of MIT (market impact team) in this team of 5 to 7

members are made. It looks after all the outlet of their area.

Through MIT following work is being performed.

1. Outside signage

2. Worm display

3. Great the customer

4. Inside signage

5. Cooler purity

6. Range selling/ order taking

7. Thanks

EVERY DEALER SURVEY (EDS)EDS is a method of collection of data in which each and every outlets of cold-

drinks was to be covered .which was decided through random selection of map of

varanasi.

In this particular area was allotted to each individual in which they had to find

out Distribution gap and draw the map on the basis of which company will plan

for efficient route.

Route efficiency

To provide route efficient structure we first have to analyze distributor’s capacity.

Evaluating distributor’s capacity to execute

Evaluating distributor.

-Distributor dependent on our business

- Relationship with retailer

Owner market visit.

-Self managed v/s manager dependent

-Distributor interest and attitude.

Evaluating distributor salesman.

-Salesman quality.

-salesman continuity.

Validation

-Contribution of discounted volume to total volume.

-Contribution of sub-distributor / fat dealer volume to total volume.

Need for efficient route

Market changes-number, size, and volume of outlets change.

Product mix in the market changes …....Pricing?

Competition enters the market.

Introduction of new distributor in that period.

Purchasing new vehicle for improving productivity.

Changing analyzing traffic pattern.

Objectives of efficient route design

Limited geographical area of the distributor.

Maximizing daily number of standards –calls and cover more area in the market.

provide the necessary service frequency to increase the daily visit.

Guidelines for sequencing outlets

Avoid traveling the same street twice to avoid wastage of time.

Avoid repeating loop.

Avoid repeating loop and improving efficiency.

Do not skip outlets and trying to increase the efficiency.

Work towards sales depot.

Plan entry and exit point and mapping their route design.

Left-hand traffic rules – make left turns.

Minimize driving time and using shortest route of reaching the retailer.

Minimizing waiting time and trying to visit the smaller outlet first.

Building an efficient route

Sequencing

Work from the edge of the territory towards depot

Work for the farthest outlet towards depot.

Work from largest vehicle size to small.

Steps in creating routes1. Firstly a database is created every dealer through survey and record is maintained

about dealers. After this we have to analyze the capacity and capability of dealers. So it

will help in further regulating the activity.

2. Then we can easily formulate all the outlet in the area and finding about their daily

sales. If it sales good quantity of unit then that outlet can be segmented as an important

outlet.

3. Then different zones are to be created and different program is made regarding each

zone and work is assign to each salesman to handle zone in an effective way.

4. Calculate the total time required in all kinds of activities and matching it with the time

available with the salesman and trying to complete all activities in less cost and time.

5 .Then we have to calculate the number of route in a particular territory and we have to

assign activities to salesman. On different route and find the cost involve in the sales

process.

6. Then proper planning is required to build different and trying to achieve proper route

policy through which more and more areas can be explored and maximum outlets can be

reached.

There are five main steps in creating route

1. Locate outlets on map.

2. Create zones.

3. Calculate available time.

4. Calculate number of route.

5. Build routes.

SCOPE OF THE STUDY

&

IMPORTANCE OF STUDY

SCOPE

This project report has been done for “Identifying distribution gap & planning for

route efficiency” of coca-cola. So this project has lead emphasis on distribution of coca-

cola. Availability of all brands &effective route planning for the distributor.

Coca-Cola is one of the major players in the highly competitive carbonated soft drinks

market. The project includes only the Hindustan Coca-Cola Beverages. Ltd. company of

Varanasi.

Area of the study pertains to Coca-Cola Company only.

Studies conducted in for the months of May and June only.

The main purpose was to study the distribution gap in Varanasi city.

Importance of the study

1.To access the organization effectiveness & distribution system of coca-cola plant.

2.The study provides the solution & way to reach out of the ultimate consumer &thus

become market leader.

3.The study provides the plan to minimize the transportation cost &time of distributor.

4.The study provides proper availability of all the brands, demanded by the outlet.

5.To analyze the ratio of the coke & Pepsi outlet.

OBJECTIVE OF STUDY

OBJECTIVES

1.Proper route planning

2.To minimize timing of auto by proper route planning.

3. To minimize the cost of distributor.

4.Identifying all outlet channels as well as brand wise.

5.To build good relation with shopkeeper.

6.To analyze the market coverage & consumer satisfaction.

7.Through study of distributor network.

8.Maximize daily no. Of standards call & cover more &more area in the market.

9.Find the total market share of Coke product in these areas in comparision of others.

10. To measure the satisfaction level of the retailers and dealers in respect of services,

advertisement and promotional activities.

To measure the availability of Coke products.

Proper visibility, Fridge Purity, display of Coke products in the different Coke

outlets.

RESEARCH METHODOLOGY

RESEARCH PRAPOSALThe following steps are followed to arrive at the research objectives and research

questions.

Ascertain the decision-making objective.

Understand and the background of the problem.

Isolate and identified the problems not the symptoms.

Determine the unit of analysis.

Determine the relevant variables.

State the research objective and research questions.

SAMPLING DESIGN:

The following steps were involved in the sampling planning.

Define the population.

Census vs. sample.

Sample design.

Sample size.

Executive the sampling process.

The first step toward a sample design must include the definition of

the population for the research. The population was defined as the whole

sum of individual living in Varanasi city. It was also determined that a

sample survey will be conduct. The sampling was so designed to cover

all segment of the soft drink market.

SAMPLING ERROR:

An estimation from the sample is not exactly be jthe same as a

census random sapling error is the difference between the resultant the

result of the census conducted by identical processes this error can occur

because of the chance variation in the selection of sampling units.

SYSTEMATIC ERRORS:

These are error due to non-sampling factor primarily the nature

of a study design and correctness of execution these errors are not due to

chance variations.

PRIMARY DATA COLLECTION:

Data collection method procedure used by researcher was mostly

by direct interviews the researcher conducted the interviews in an

informal manner in order to get the attention of the respondent. On may

occasion the respondents refuse to answer the question in that case they

have to be probed to answer.

Complete care was taken to record the actual respondents to give

the clear picture while analyzing the questionnaire.

Sampling Plan

Hypothesis

1. The inventory management plays key role in the distribution system.

2. The transportation system is a crucial factor in the effective flow of

distribution system.

3. Competitor awareness is crucial factor in the effective flow of

distribution system.

4. Limited geographic area of the distributor.

5. Provide the necessary service frequency to increase the daily visits.

Sampling Frame-

The sampling frame is Varanasi city (Lahuravir, Pichasmochan, Pandariba,

Beniabagh, Chetgang, Bari piyari, Senpura, Adampura)

Sampling Size-

For the study it was decided to collect a sample of 250 retailers.

Sampling Method-

For the purpose of the project Random sampling was undertaken and 250

retailers of soft drinks were being approached.

Instrument for Data Collection-

Collection forms the basis of research project. It is integral part of

research. Keeping in the mind the questionnaire was being designed. It was a

structured questionnaire.

The questionnaire was framed keeping in mind that how this would

provide most relevant and complete information required fulfilling the

objective of the research.

Both quantitative and quantitative analyses were used to link question and

dear combined interference from different questions.

INTRODUCTION OF THE INDUSTRY

COMPANY’ PROFILE

Coke stated its operation ii India in 1973 and that was closed in late 70’s itself.

Coke re-entered Indian market in the year 1993 and in the next two years coke

acquired brands of Parle Beverages (Thumsup, etc).due to which company

became market leader within few months.

Currently Coke is third Largest FMCG Company in India.

Company’s operation is being governed by HCCBPL and HCCM Co. Pl which

are hundred percent subsidiaries of the Coca- Cola Company.

Coca- Cola has been divided in India into five zones namely:

1. North

2. East

3. South

4. Central

5. West

Further, South zone is divided in 2 zones.

Company’s product are distributed through Direct and Indirect routes

In direct route products are sold directly from company’s vehicle to retail outlets

(for e.g. Kanpur)

In indirect routes various marketing intermediaries play their role in distribution

channel (for e.g. Varanasi)

Coca- Cola has both FOBO ( Franchise owned Bottling Operation )and COBO

(Company’s Owned Bottling Operation)

The bottling plant is divided into types:

1. Brown Field

2. Green Field

BREIF HISTORY OF COCA- COLA

Coca- Cola is the most popular and biggest selling soft drinks in History as well as

one of the best known brands around the world. The company was created on May

8th, 1886 by Dr. John Smyth Pemberton in Atlanta. He made world’s favorite soft

drink by mixing carbonated water with caramel colored syrup. The name Coca- Cola

and Trademark was carried by Pemberton’s partner Frank. M. Robinson.

Asa G Candler acquired Coca- Cola in 1891 by an investment of $2300. He was a

druggist and a businessman in Atlanta. Candler sold out the company in 1919 to Atlanta

banker Ernest Woodruff. His son Robert Woodruff was elected as President in 1923.

In 1967, a Minute Maid Company was formed which added fruit juice concentrates and

adds to portfolio. The Coca- Cola was acquired by Columbia Pictures and Belmont

Spring Water Company in 1982.

In 1989, Belmont Spring Water was sold and its stake in Columbia Pictures

Entertainment Inc.A joint venture Company was formed in 1991 with the name of Nestle

SA to manufacture market and distribute Nescafe.

After sometime Coca- Cola moved from carbonated soft drink Company to o total

Beverages Company while presence of Fruit Juice, Coffee and Health Drink or Water.

DIVERSITIES OF COCA- COLA COMPANY

Across more than 200 countries…. More than 100 languages…. A multitude of cultures

and geographies, the Coca- Cola Company strives to be a special part of people’s life.

This privilege comes with a responsibility.

The Company embraces its commitment to diversity in all its forms as a core value.

Diversity of race, gender, sexual orientation ideas and ways of living , culture and

business practice provides the creativity and innovation essential to our economic well

being. Equally important is a highly motivated, healthy and productive workforce that

achieves business success through superior execution and superb customer satisfaction.

In today’s volatile economic environment, this kind of performance requires unprecedent

commitment to the principles of integrity and leadership. The Coca- Cola Company

intents on keeping this commitment.

MISSION OF COCA- COLA COMPANY

The Mission of The Coca- Cola is to increase share owner value over time. The company

accomplishes the mission by working with its business partners to deliver satisfaction and

value to customers through a worldwide system of superior brands and services, thus

increasing brand equity on global basis.

MISSION OF COCA- COLA INDIA

Create consumer products, services and communications, customer service and bottling

system strategies, processes and tools in order to create competitive advantage and

deliver superior value to:

Consumers, as a superior beverage experience.

Customers, as an opportunity to grow profits through the use of finished drinks.

Bottlers, as an opportunity to grow profits and volume.

The Coca- Cola Company as a trademark enhancement and positive economic

value added.

Suppliers, as an opportunity to make reasonable profits which creating real value

addition in an environment of system- wide teamwork, flexible business system

and continuous improvement.

Coca- Cola India Associates, as superior career opportunity.

The Indian society in the form of a economic and social development.

VISSION OF COCA- COLA INDIA

Provide exceptional strategic leadership in the Coca- Cola India System, resulting, in

consumer and customer preference and loyalty, through Coca- Cola’s commitment to

them and in a highly profitable Coca- Cola Corporate branded Beverages system.

GUIDING PRINCIPLES OF COCA- COLA INDIA

1. We will conduct ourselves and our business activities with high standard of

honesty, integrity and professionalism.

2. We will recognize the positive contribution that we make as individuals and team

members to produce our business success.

3. We will encourage learning environment where people constantly grow, develop

and contribute.

4. We will strive for excellence and seek continuous improvement in everything we

do.

5. We will respect all stakeholders, including employees, partners and suppliers and

instill them with passion, to deliver quality goods and services.

6. We will foster initiative and creativity by empowering individuals to attain well

defined objectives.

BOTTLING HISTORY OF COCA- COLA

1886- Coca- Cola originated as a soda fountain beverage in 1886 selling to five cents a

glass. Early growth was impressive, but it was only when strong bottling system

developed that Coca- Cola became the world’s famous brand.

1894- A modest start for a bold idea

In a candy store in Vicksburg, Mississippi, Brisk sales of new fountain beverage called

Coca- Cola impressed the stores owner, Joseph A. Biedenharn. He began bottling Coca-

Cola to sell, using a common glass bottle called` a Hutchinson.

Beidenharn sent a case of Asa Griggs Candler, who owned the Company. Candler

thanked him bit took no action. One of his nephews already had urged that Coca- Cola be

bottled, but Candler Focused on Fountain sale.

1899….The First Bottling Agreement

Two young Attorneys from Chattanooga, Tennessee believed they could built 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- for the sum of one dollar. A third Chattanooga lawyer, John T. Lupton, soon

joined their venture.

1900-1909….Rapid Growth

Three bottling pioneer bottles divided the country in to territories and 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 and most of them were family owned business. Some were open

only during hot weather months when demand was high.

1916….Birth of Contour Bottle

Bottlers worried that Coca- Cola straight-sided bottle was easily confused with

imitators.A group representating the Company and the bottlers asked glass manufacturers

to offer ideas for a distinctive bottle.A design from the Root Glass Company of Terre

Haute, Indiana won enthusiasm approval.The Contour bottle became one of the few

packages ever granted trademark status by the U.S Patent Office.Today,its one of the

most recognized icons in the world even in the dark.

1920’s ……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 fuel steady growth .Six bottle cartons were a huge hit starting in

1923.A few days later, open top metal coolers became the forerunner of automated

vending machines.By the end of 1920’s, bottle sales of Coca- Cola exceeded fountain

sales.

1920’s and 30’s…International Expansion

Lead by Robert W. Woodruff, chief executive officer and chaireman of the board, the

Company began major push to establish bottling operation outside U.S plants were

operated in France, Guatermala, Honduras, Mexico, Belgium, Italy and South Africa.By

the time World War IInd began, Coca- Cola was being bottled in 44 countries.

1940’s……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 world wide business.

1950’s…..Packaging Innovation

For the first time, consumer has chosen Coca- Cola package size and type 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.

1960’s …..New Brands Introduced

Sprite, Fanta joined Coca- Cola in 1960’s.The 1980’s brought Diet Coke.Today scores of

other brands are offered to meet consumer preferences in the local markets around the

world.

1970’s and 1980’s….Consolidation to serve Customers

As technology leads to global economy, retail customers of the Coca- Cola Company

merged and evolved into bottlers consolidated to better serve gaint international

customers.The Company encouraged and invested in a number of bottler consolidation to

assure that its largest bottling partners would have capacity to lead the system in working

with global retailers.

1990’s……New and Growing Markets

Political and economic changes vast markets that were closed and underdeveloped for

decades.After the fall of Berlin wall, the Company invested heavily to invest in Plants in

Eastern Europe.As the century closed, more than $1.5 billion was committed to new

bottling facilities in Africa.

21st Century……..Think Local, Act Local

The Coca- Cola bottling system grew up with roots deeply planted in local communities.

This heritage serves the Company well today as consumers seek brands that honour local

identity and the distinctiveness of local markets. As was true a century ago, strong local

based relationship between Coca- Cola bottlers, customers and communities are the

foundation on which the entire business grows.

PRODUCTION:

The manufactory of different types of Brands of soft drink comes

Under the production department . It comprises the process of Water

treatment ,Syrup preparation , Container washing , Mixing & proportioning, filling &

Crowning and then the final Inspection of the product.

SHIPPING :This department takes is also termed as Dispatch Section . Goods are received

And dispatched from shipping. It works in receiving of Products from other

Unit transferring of full form production , Inventory Management of finished

Products in First out (FIFO) method , dispatch of goods to distribution

Empty received and dispatch to other units.

PLANT LAYOUT AND MACHINERYPlant has been constructed in a pollution free area and the construction is as per

the construction guidelines by the Coco-Cola company (TCCC) and

meets all the requirements of a food production facility .

As per the Quality standards process areas such as Utilities and admin Toilets etc.

The complete production line is supplied by worlds renowned machinery

Manufacturer for Beverages and Breweries.

FILLERS (KHS)The Filler is the machine which fills the beverage in to clean bottles and seals

To the bottles with crown / cap immediately after filling . Following are

Some of the key highlights of this state of art technology machine.

rate filler speed 600 bottles /minute i.e. 1500 cases /hour.

2. Continuous and automatic filling under Co2 pressurized atmosphere with

minimum operator / Human contact.

Complete machine made of SS 304/316 grade stainless steel and food grade

material.

With stand up to 95 C temperature and chlorine sanitation in order to facilitate

proper cleaning and sanitation

5. Facility to seal the bottle immediately after filling to prevent contamination.

Fully guarded and with all safety control which prevent damages to machine

product and personnel.

Fully automated with easy operator controls and access to all function at one

place .

MOJONNIER:The Mojonnier from Sasib is the machine which blend the syrup , water and

carbonate with Co2 as per the company specifications .

The key features of this machines are :

1 . Capable of producing 11000 liters of beverage per hour .

2. Completely concealed machine and no exposure of nay food

Or food contact surface to external environment.

3. Made of SS304 /316 Stainless steel and food grade material.

4. With stand up 95 0C temperature and chlorine sanitation in

order to facilitate proper cleaning and sanitation.

5. Fully automated with easy operator controls and access to all function at one place.

6. Sanitary design sample valves for Microbiological sample collection.

BOTTLE WASHER :Another important machine is the bottle washer manufactured by Hilden which

was market returned empty bottles/ new bottles It has the following key features .

Double ended type where the dirty bottle enters at one end and clean

bottles will come to the other end . The clean bottle discharge and meaged

with the bottling hall interior which is concealed and controlled

environment this prevents the contamination of washed bottles with

unwashed bottles

sections with different temperature ranging from 40 c to 75c and

concentrations of washing compound (NaOH ranging from 2.4% with

additional support of wash additives to enhance the washing) .Rinse

section for mechanical action and to remove the entire trace of washing

compounds etc.

3. Bottles comes out of the machine will be of commercial sterilization

Quality.

4. Soft water used for bottle washer meets portability norms ,IS 10500

specifications as well as WHO specification.

CASER AND UNCASER :Caser and uncaser are the machines used to put bottles and the conveyors

from

cases and to put filled bottles back to crates .

This improves the efficiency and reduce losses due to breakage during man

handling .

Conveyors are made of SS again and carry the bottles from one machine

to

another washed bottles are carried from bottle washer to filler by conveyors

with

Out any human intervention.

STORES All kinds of materials are handled in stores either it can be of raw material

For production or materials used in the office. A proper sequence is followed.

At very first , purchase requisition is prepared by each department and then

Material are purchased from the fixed vendors, after this the material are

Distributed as per the requirement. In broader terms we can say that the

Activities performed in this process are receiving of material ,issuing of

material , rejection handling, scrap handling .

QUALITY ASSURANCE (QA) :-QA department ensures the total quality in each and every aspect of the

Organization . This quality is not only concerned with individual department

Like production of goods but it is concerned with every functioning of the

Organization such a hygiene in the organization like providing the nutrias

food

from the canteen cleanliness in the bathrooms not polluting the environment

etc . One of the major functions of QA department is pre and manufacturing

test which ensure zero defect of that consumer can get right quantity and

quality products . As the procured materials have to undergo a rigorous

quality check . Even before procurement the quality of the material has been

ensured by the sample check of material.

QUALITY DRIVES BUSINESS

`

CUSTOMERS Delighted Loyal

“Value of Money”

EMPLOYEES Empowered act like Owner

“place to work”

INVESTORS Consistent Growth Value

Addition “Plant to invest”

EXTERNAL ENVIRONMENT

Environmental Friendly

“Responsibility Corporate Citizen”

Investors find Consistent growth and value addition and feel that this

Organization is the right place to invest.

Customers are delighted , Loyal and feel they got value for money .

Employees feel empowered and act like owners. They feel this is

the

Right place to work .

Society perceive organization as a responsible corporate citizen .

Organization manage business ethically good transparent corporate

Governance . It has policies to maintain quality of the environment .

Marketing strategy of coca-cola

As million of rural Indians reach for a cold soft drinks in the hottest summer in

years, coca-cola India seems to have discovered the consumers who could rescue its

dismal sales record. Coca cola India totally misjudged rural India home to two third of

the country’s 1 billion population, when it re-entered the country a decade ago.

Yet the company’s new strategy of smaller bottles, price cuts and advertising that

straddles cities and villages pushed turnover last year up by a quarter to nearly Rs.5000

crore. And thumbs up, a local brand that Coca-Cola bought and then ran down, is also

recovering spectacularly. The success of Thumbs Up, whose market share is now roughly

equal to that of market leader Pepsi at 23%, is an embarrassment for Coca-Cola, which is

in third place with 16.5% (from 12% three years ago) in India’s Rs.8000 crore soft drinks

market. Coca-Cola returned to India after being kicked out by the government in the mid-

1970s. It paid a high price for the then market leader, Thumbs Up, and tried to kill it off

in the mistaken belief that this would pave the way for Coca-Cola’s rise. Extravagance,

an optimistic and naïve reading of the market and mismanagement of its new bottling

assets led Coca-Cola to write down Rs.2000croreof its Indian assets in 2000. The greatest

indignity is that India is one of the few markets where Pepsi has outsmarted Coca-Cola.

That makes its recovery all the more remarkable, says Mr.C. Srinivasan, chairman of

business consultant AT Kearney India. Coca-Cola in India management, now stable

after recent flurry of departures, persuaded the US parent to persist with India, and won

$100m to fix problems such as poor distribution. Its Atlanta headquarters was won over

because of India’s potential. India’s per capita consumption of carbonated drinks is less

than hall the level in Pakistan and about 8% of China’s. Mr. Gupta argued that closing the

gap would only come by chasing the rural consumer.

“We had to address the 75% (that lives in rural areas) and not just the 25% in

cities and that meant using small pack innovations” says Mr. Gupta.The only consumer

goods companies that make it in India are those that sell micro-sized products at low

prices”.

Coca-Cola’s 200 ml bottle (down from 300 ml) sells for Rs.7, half the price of a

conventional sized bottle to achieve a return on this “low margin, high volume” strategy.

Coca-Cola had to shrink its ballooning costs, while raising output in a market growing at

just 8-9%per year. Coca-cola added 30 assembly lines, including five plaints, cut costly

staff, revamped transport, shrunk bottles and made them lighter and packed in smaller

crates to increase a truck’s carrying capacity, added distributors and expanded the

number of outlets in towns and villages by a fifth to about 1 m. Coca-Cola’s aim was to

“lock in” retailers in villages of at least 1,000 people connected to usable roads. One

method was to help those with no saving or access to formal credit to buy their costliest

asset: a fridge. The company negotiated big discounts from fridge producer, placing an

order equivalent to two months output of the domestic fridge industry. Discounts were

passed on to the retailers, cutting the average purchase price by Rs.3, 000 more than three

month’s wages in a village.

Finally, Coca-Cola dumped a global advertising campaign that was irrelevant to

the Indian market and adopted one featuring Bollywood stars. “The campaign is finally

speaking to the right market” says marketing consultant Mr.Jagdeep Kapoor.The adverts

also loudly proclaimed the Rs. 5 price benchmark, meaning retailers could not

overcharge.

The re-localization of Coca-Cola:

A glance at the 1999 Annual report of The Coca-Cola Company leaves you with a

strong impression of two words that seem to be very deeply etched in every statement

made by the company –Consumer and Localization. The Chairman Douglas Daft states

in his address to shareholders that, “If there’s one thing that I have learned in my 30 years

at Coca Cola it is –Think locally and act locally”. Coca-Cola’s localization drive appears

to be partly spurred by the adverse impact on the image of the company, due to the

various issues that cropped up last year in different parts of the would. Like the product

contamination in Belgium and France, the problems with regulators in Europe, the racial

discrimination lawsuit in United States.

In a recent article in The financial times, Mr. Daft talks of how Coca-Cola whose

basic success emanated from its strength of being a multi-local business relying heavily

on the insight of local business partners, quite forgot the secret of its success and veered

on the path of centralization. He has stated in this article that Coca-Cola wandered off the

right path and endured a year of dramatic setback, by ignoring the changing global

scenario and continuing to believe that a strategy that was once successful will always

yield results. As he puts it. “As the Century was drawing to a close, the world had

changed, and we had not. The world was demanding greater flexibility, responsiveness

and local sensitivity, while we were further centralizing decision making, standardizing

practices and were moving away from our traditional multi-local approach”.

The company in 80’s and 90’s had focused on centralizing its operations for

enabling effective management of a vast global enterprise that was being spread over 200

countries. It has now woken up to the fact that the would is changing very fast today and

that a localized management that can quickly respond to the challenges and needs of the

relevant marked will be critical to success, rather than a unified management at the

center. And that is precisely what Coca-Cola has set out to do. It appears to be handing

out a greater degree of freedom and responsibility to the frontline managers in their

respective areas of operations. It has decided to cut jobs and convert itself into a leaner

structure. In India too, the complex holding structure has been broken down and

converted into a simplified structure. A single holding company Hindustan Coca-Cola

Holdings Pvt. Ltd and one downstream subsidiary- Hindustan Coca-Cola Beverages –

formed by the merger of 4 bottling subsidiaries of Coca-Cola and that of Schweppes now

operate in India. The parent has performed a comprehensive review of its Indian bottling

operations and has announced that it will be writing off $400mn worth of assets in

India in the first quarter of this year.

The meeting hosted last week by the company to update investors on its business

strategies and outlook for the future also sang tune of how members of the global. Coca-

Cola management teams are implementing their “Think Local, Act Local” philosophy.

The company’s focus, according to the management, will be to encourage higher

consumption of non-alcoholic beverages and the coca-cola brands in every country. This

will be achieved through an intense focus on consumers, communities, customers, the

Coca-Cola system and Coca-Cola people. The Consumer focus strategy involves using

innovative and tailored marketing programs based on local consumer insights to enable

the company to keep growing. “We want to ensure that we have a tailored nonalcoholic

beverage portfolio in every community that touches consumers in locally relevant ways”

states the annual Report of the company. It gives the example of the company’s

innovative marketing strategy in India, which leveraged on the Diwali Festival and the

entrenched family values in the Indian society to connect to the Indian consumer at a

personal level. In Mr. Draft’s words “The 21st Century has taught us one important

powerful- that the next big evolutionary step in going global has to be going local”.

Soft drink business is built on two piollars-brands and Dostronitopnm. We present

below comprehensive conceptual coverage of these and other key marketing concepts.

1.Branding

2.Valuation of brands

3.Distribution

4.Marketing

5.Market Research

6.Market segmentation and positioning

7.Advertising and promotions

1) BRANDING:

What is a brand?

A brand is name, term, sign, symbol or design or a combination of them which is

intended to identify the goods or services of one seller or group of sellers and to

differentiate them from those of competitors.

A Trademark is “a brand or a part of brand that is given legal protection because it

is capable of exclusive appropriation.”

Manufacturers can use their own brands (known as Manufacturers brands) or

brands of their distributors (Distributors brands).

Why Branding?

Manufacturers\distributors use brand names for a verity of reasons from simple

identification purposes to having legal protection for unique features of the products from

imitations and help consumers recognize contain quality parameters. In some cases,,

brands are lust used to endow the product with unique story and character which itself

can be a basis for product differentiation.

Special importance of brands for soft drink products

While brands can represent all types of goods or entities, they have special importance

for products. Brand equities are stronger in soft drink products as the consumer is

reluctant to try unknown brands\unbranded products for the following reasons.

These products individually account for a small part of household spending.

Most of these products are personal use.

In many cases, it is difficult to differentiate a product on technical or functional

grounds and therefore the consumer is reluctant to switch to an unknown brand.

Successful brands generate strong cash flows, which enable the owner of the

brand to reinvest a part of it in the form of an aggressive advertisements\

promotions. This reinforces the perceived superiority of a brand.

How a brand is created?

Soft drink companies spends enormous sums on building a brand equity by way of

Advertisements\publicity

Free samples

Low entry price

Promotions (schemes for dealers, consumers etc.)

Advertisement and promotion can induce trials but for sustained loyalty the manufacturer

has to offer superior quality and value for money. Most successful brands are founded on

a chance discovery of a new product\process or assiduous research and development

work. Major players invest in R&D on their existing brands and improve the product

quality continuously to maintain their edge over competitors.

Branding strategies

a) Individual brands Vs Umbrella brands

Individual brand has its own identity and the corporate or common name is not used to

promote its equity. In case umbrella brand, there is a generic brand with association of

some values. For instance, Hindustan Lever follows individual branding strategy and has

several brands in the same category such as Lux, Liril, Rexona soaps etc. Competitor

Norma has mainly followed the umbrella branding strategy such as Norma Bath, Norma

Beauty, Irma Super, Norma Shikakai soap etc. Only recently, the company for the first

time diverted from its strategy of umbrella branding with the launch of Nima.

Advantages of Individual branding strategy are :-

Some of the products, which flop ion the market, do not have negative spill over

impact on other brands. For example, Nirma is associated with popular end of products,

which becomes a major deterrent for its expansion in the premium segment.

The same manufacturer offers consumers looking for change distinctly new brands.

But individual branding requires expensive advertisements and brand building

exercise. Also, each new brand does not benefit from the positive perceptions of earlier

brands.

In umbrella branding, manufacturers have advantage of-

Establishing a new product quickly witch association of quality/benefits of the mother

brand (a classic case in Indian context has been Godrej).

No. Need for name research, expensive advertisement for creating brand names,

recognition and preference.

b) Brand extensions

Brand extensions are used for a group of products such as Clinic Plus

Shampoo, Clinic All Clear, Clinic Plus hair oil or Close Up Renew, Close

UP Ozyfresh, Close Up Sensation, etc. The brand has some unique USP and

there are cosmetic/functional variations in the extensions. The strategy is to

build upon initial success of a brand entry by creating flanker it em and

minor variants of the basic brand. Brand extensions may be used within

product categories (In some products like shampoos, there can be natural

variants such as shampoo for normal hair, dry hair or for specific problem

solving like anti dandruff). It may also be used for different product

segments (e.g. Sun silk brand being extended to hair oil).

c) Multi brands

Marketer introduces brands mostly in large markets, which compete with

each other in almost the same segment. In multi branding, there is

cannibalization but overall result is greater market share. Net incremental

market share is enough to justify the investment in the new brand. For

instance Hindustan Lever has several brands (lux, Breeze, Hamam, Rexona,

etc) in the same category i.e. toilet soaps.

2) VALUATION OF BRANDS

Value of a brand is represented by the incremental cash flow resulting

from a product with a brand versus a product without a brand name or with

weaker brand name.

Brand valuation is a complex process and involves a lot off

subjectivity. There are no widely accepted techniques of brand valuation.

There are several considerations, which cannot be standardized or quantified

such as:

To pre-empt competition from taking over a brand.

Synergy with the company acquiring existing brands/businesses.

Strategic entry into a new product category.

Prevent damage to existing brands. Many a times stiff competition results

in price cutting aggressive promotions, lower margins for all the competing

brands.

Confidence in the acquirer of the brand to rejuvenate a languishing brand.

Value of an acquired brand

In case of an acquired brand, price paid for the brand over and above

the value of tangible assets, represents value of the brand. For accounting

purposes consideration paid for the brand is typically broken up as follow:

Goodwill

Trademark and patents

Technology and know-how

Non compete agreement

3) DISTRIBUTION:

Marketing or distribution channel refers to the set of marketing

intermediaries which manufacturers link together to reach their products to

the ultimate consumers. Depending on the product, nature of market and

manufacturers resource /strategy, there can be one or more links between the

manufacturer and consumer.

Manufacturer –Retailers

Manufacturer –Wholesalers –Retailers

Manufacturer – Stockiest – Wholesalers – Retailers.

Why use distribution channels

There are several benefits for a manufacturer particularly in case of

consumer goods to rely on these marketing intermediaries rather than

develop one’s own distribution network.

Efficiency in performing the basic marketing task by these

intermediaries who through their experience, specialization, knowledge of

local conditions, contacts and scale, offer services which manufacturers can

scarcely do on their own.

Cost advantage most of these intermediaries in India are family

owned outfits. Their cost of operations and overheads are substantially

lower.

Focus manufacturers can concentrate on their core activity and

optimize return on assets.

Retailing

In India, there is over 5 million retail outlets dispersed al over the country.

The retailing industry provides employment to over 18mn people. I out of

every 25 families in India is engaged in the business of retailing. Ownership

and management are predominantly family controlled. However in sharp

contrast to developed countries, unit average size of a retail outlet in India is

very small.

The retail outlet in India can be broadly categorized as follows:

Grocery stores

General-purpose stores

Food stores

Pan bide shops

Chemist/drug stores

Cold chains

Others

The relative share of grocers dropped from over 50 %in the early 90’s to

35%in the late 90’s. Chemist outlets on the other hand, have been expanding

their product range to include high margin FMCG products from shampoos

to ketchup. Panwallas are also emerging as full-fledged consumer product

outlets.

Table: Growth in retail outlets (m nos):

Year Urban Rural Total1978 0.58 1.76 2.351984 0.75 2.02 2.751990 0.94 2.42 3.361996 1.80 3.33 5.13

Composition of urban outlets:

Grocers34.7%

Cosmetic stores4.0%

Chemist6.3%

Food stores6.6%

General stores14.4%

Pan stores17.0%

Others17.0%

Composition of rural outlets:

Grocers55.6%

General stores13.5%

Chemist3.3%

Others27.6%

4) Marketing:

Direct Marketing:

In direct marketing manufacturers reach the consumers directly.

Direct marketing can be undertaken in several ways such as mail order, own

retail outlets, mobile vans etc. A new innovative approach to direct

marketing viz. multilevel marketing is becoming increasingly popular. Also

gaining ground slowly is E-tailing i.e. selling products through the Internet.

Multilevel marketing model

Multi level marketing refers to direct marketing through an ever-

increasing number of direct distributors. Independent distributors sell

products directly to the consumers and appoint new distributors and train

them. The distributor earn s commission at two levels, one is his/her own

commission and two a proportion of commission earned by other

distributors appointed by him/her. None of these distributors are employees

of the company.

Distributors are not allowed to sell these products to retailers. The

company saves about 25% of realizations by eliminating retail channel,

which is shared with distributors.

The company insists that the distributors should take prior

appointment with the consumer. Personal interaction is not only convenient

but adds value as customers get valuable advice on the product and how to

use it.

This helps in creating awareness and removing misconceptions like

cosmetics are harmful for the skin.

Direct marketing (multi level approach) in personal care products is

extremely popular abroad. In Brazil, about 60% of personal care products

are sold through directly marketing. In India, direct marketing has been

slowly growing, Word of mouth has a strong impact on purchase decision of

a consumer, specially in personal care and cosmetic products. Direct

marketing has mainly been undertaken buy the new MNCentrants (notably

oriflamme, Avon). Hindustan Lever has also recently launched a new

personal product brand Aviance which is sold directly to consumers

exclusively by trained beauty specialists. Direct marketing has also been

extensively used in marketing of household appliances like Vacuum

cleaners. However given the widely spread geographical area in India,

direct marketing can not be easily used to build an extensive national reach

and is more likely to be used as a supplementary channel.

5) Market Research

Market research activities encompass studies on

Market characteristics

Measurement of market potential and size,

Market share analysis,

Competitive products,

new products acceptance/product preference,

Sales (region wise, consumer wise etc ) analysis,

Short/long term sales forecasting

Advertisement effectiveness

Post- shipment data (actual shipment by manufacturers),

Retail stores audit (actual sales at sample outlets)

Trade feedback and distribution,

Brand recall, point of sale material etc.

It requires skilled people for data collection as well as analysis. Several large

consumer companies have in-house MR department. Most others retain specialized and

professional MR agencies.

Market research approach

Typically, a market research activity involves the following 5 steps,

Problems definition: This forms the basis of research and failure to

identify the problem precisely will result in finding a correct solution for a

wrong problem.

Research design: The next step is to set out objectives of research clearly,

determined data collection methods, finalize research instruments and

sampling plan.

Fieldwork: After finalization of research design, the actual data collection

begins. It can be done by the agency on its own or through subcontracting

to third parties. Data is collected by questionnaires/direct interviews,

telephonic interviews, simple observation etc.

Data analysis: The next step forms the heart of research activity. It

involves extracting meaningful information from the data collected and

analyzing the information statistically and also from business perspective.

Statistical techniques include simple/multiple linear programming models,

time series, exponential series, regression analysis, simulation, Market

chain process etc.

Report preparation: The final step is to prepare a report, present major

findings in a manner amenable to managerial decision taking. There may

be some follow up and revalidation required.

6) Market segmentation and positioning

A market is defined as individuals, organizations with purchasing

power, desire/ willingness to purchase. Markets can be categorized based

on the buyers as follows:

Producers market trade in finished goods, services from producers

Consumer market: refers to market where end consumer buys the

products for personal or household use. Consumer market can be

bifurcated into durables and non-durables markets. The non-durable

products are also known as fast moving consumer goods.

Market segmentation

Markets comprise of heterogeneous segments of consumers. Maarket

segmentation refers to process of identifying a group of buyers with

similar buying desires and requirements. The marketer targets each

segment with a distance marketing mix.

Broadly markets can be segmented on the following basis:

Geographic: location, nations, states, cities, rural, urban areas etc

Demographic variables such as age, sex, family size, marital status,

income, occupation, education, family life cycle, religion, nationality,

social class.

Psychographic variables such as lifestyles, personality, buying motivation,

product knowledge.

Benefits segmentation divides the market along buying motives. For

instances, in case of toothpastes, benefits could be decay prevention, white

teeth, fresh breath, good taste, low prices etc.

Within a segment, there can be further segmentation such as a market

segmented along geographic areas can be further segmented on the basis on

income and so on.

Income segmentation

Income segmentation is one of the most popular and convenient way

of segmenting the market. Consumers can be broadly divided into low

income, middle income And high income group. Most FMCG products are

also segmented along the target consumer segments in economy, popular

and premium categories. Price differential between popular and premium

products is significantly higher than what would be warranted by

manufacturing cost differentials. Marketers create product differentiations

with focused advertisement/ promotions and superior packaging also.

7).Advertising and Promotion

Advertising consists of non-personal form of communications. The

communication is conducted through trade media under player

sponsorship. Advertising aims at providing information about the product,

arouse demand for the product and emphasize on superior features of the

advertised product over others. Players have to decides on overall

advertisement budget message and mode of presentation type of media

timing etc. they invariably do post audit of advertising efficacy.

Proposition are of two types viz pull promotions where consumers are

incentives and push promotions where dealers

/retailers are incentives.

Consumer demographics

Get a feel of Indian consumer markets. Data on populations, states, income

levels, penetration; media reach and more

Population

Metropolitan cities

States rural and urban Population distribution (religion – wise)Population distribution –(language wise)Desertion by population strata Population distribution age wise Occupation wise distribution Population projectionsDemographic projections

Indian states

. Population –rural and urbanNumbers of villages Per capita and net domestic products

Literacy

Media reach

Urban and rural reachUrban 1998Rural 1998State-wise 1999 Demographic profile Socio-economic classEducation wise (urban and rural)Age group (urban &rural)Media reach- satellite penetration (urban +rural)Media reach-sattelite penetration (by region)Media reach- satellite penetration (state wise)

Penetration of consumer expendables

Penetration rates- rural & urbanPenetration rates- urbanPenetration rates-rural

Key static’s: -

Indicator of economic growth Key static’s of Indian economy Demographic profile of India Snap shot of India

Private consumption expenditure on food:-

PFCE: food beverage& tobacco

PFCE: food

PFCE: cereals &bread

PFCE: MILK & MILK PRODUCTS

PFCE: coffee tea &cocoa

PFCE: beverages,pan &intoxicants

PFFCEE: beverages

PFCE: tobacco and its products

Distribution Management:

Distribution management is logistics control process that applies

situational understanding from both the operational and logistical common

operation pictures in order to dynamically control synchronize the flow of

material through the distribution pipelines, including retrograde and lateral

distribution. The last part of the definition – retrograde and lateral

distribution – is critical to future success and is often overlooked in

distribution management schemes,. Our ability t o move materiel in any

direction through the pipelines provides an economy of effort that actually

becomes a force multiplier. In this manner, distribution management

becomes a key enabler of logistics transformation, by reducing materiel

requirements to only those that are needed and by leveraging stock age

positioning to reduce the total cost of sustainment.

Distribution Management: when you’re operating multiple plants over

a large geographical area, knowing exactly what you have and where it’s

located can be tremendous competitive advantage. Frontier’s Distribution

Management components allow you to access real- time imjventory and

shipping information across you enterprise, as well as historical audits that

can help with planning for the future.

With frontier, you will always know you inventory requirements availability

for every product at every plant. You can instantly find transit status for

pants and finished goods. Frontier helps you plan more efficient truck

loading and shipping routes. You will also enjoy shipping and billing that

is tightly integrated from the initial sale through accounts.

A definition of dynamic control is also required before we go

further. Dynamic otrol is the distribution manager’s ability kto rapidly set

and change priorities and modes of transportation is response to

waerfigher’d requirements. If Quartermasters cannot dynamically control the

delivery of supplies and materiel, we remain at the lmerey of the

transportation system and will be forced into the comfort and expense of a

stock age- based supply system.

DISTRIBUTION MANAGEMENT PRODUCT MODULES.

Advanced Forecasting

Advanced Pricing

Advanced Stock Valuation

Agreement Management

Bulk Stock Valuation

Enterprise Facility

Planning Inventory Management

Daily shipping activities at coca-cola

BSR

(Bonded storage area)

1.Daily report

2.Physical stock verification

3.UCR REPORT

4.RG1

5.LEAKAGE AND BREAKAGE REPORT

6.STOCK COVERED WITH TARPAULIN

7.SHIPPING OFFICE HOUSE KEEPING

EMPTY

1. CHECK FOR PENDING ERA

2. BREAKAGE

3. PHYSICAL STOCK VERIFICATION

4. BREAKAGE HANDLING

5. HOUSE KEEPING OF EMPTY YARD

DPG

1.PHYSICAL STOCK VERIFICATION

2.DOD&BOD REPORT

3.HOUSEKEEPING OF DPG

INDIA DIVISON

The head quarter of India is at

Enkay towers, udyog vihar,

Gurgaon.

Coca-cola became three largest FMCGfrom zero in India in just 8years.

There are 40 producing unit across the country.

There are 5 regions in India viz, north, south, west, east &Andhra pradesh.

The company operation in two types of bottling operation viz,

1.COBO (COMPANY OWNED BOTTLING OPERATIONS)

2.FOBO (franchiseeownes bottling operation)

The North Region

The headquarter of northern region is at jmd towers, regent square,

gurgaon.it comprises of delhi, Westorn up, eastern up, Jammu and jaipur

units. It has 9 production units viz, Delhi jaipur, Kanpur, Varanasi, dasna,

Jammu, Delhi FOBOs & east –west up FOBO. It is the largest region in

India with 1313 employees.

Products OF COMPANY

It has brown colour with content of co2, which makes its cola flavour

heavy. It is available in different volumes in market like:

1. 200 ml glass bottle

2. 300 ml glass bottle

3. 500ml pet bottle

4. 600 ml pet bottle

5. 1 litre glass bottle

6. 2.25 litre pet bottle

It has dark brown colour with very high content of co2

which makes the COLA flavour very heavy. It is available in

different volumes in market like:

1. 200ml glass bottle

2. 300 ml glass bottle

3. 500 ml pet bottle

4. 600 ml pet bottle

5. 1 litre glass bottle

6. 2.25 litre pet bottle

It comes in many flavors like orange, with light content of

CO2 that makes its make its flavour delicious. It is available in

different volumes in market.

1. 200 ml glass bottle

2. 300 ml glass bottle

3. 500 ml pet bottle

4. 600 ml pet bottle

5. 2.25 litre pet bottle

Limca has light grey colour with light content of CO2that

makes its flavour tasty. It is available in market in following

packs of quantities:

1. 200 ml glass bottle

2. 300ml glass bottle

3. 600 ml pet bottle

4. 2.25 litre pet bottle

Sprite

It is colourless with packing in green coloured bottle. It has normal

content of CO2. it has a nice flavour available in market in following

packing:

1. 200ml glass bottle

2. 300 ml glass bottle

3. 500ml glass bottle

4. 600 ml pet bottle

5. 2.25 ml pet bottle

Maaza

It is of yellow color with decent taste of mango. It does not

contain CO2.

1. 250 ml glass bottle

2. 200ml tetra pack

Soda-It is colourless & available in market in 300 ml glass bottle in market.

Kinely water- it is a mineral water available in following volumes in

market:

1. 500 ml pet bottle

2. 1 litre pet bottle

3. 2 litre pet bottle

Price list of coca-cola products

Product packing quantity mrp(per unit).

BRANDS pack

Quantity case

Outlet price/c

Mktprice/ case

Margin/ case

Mrp/ bottle

Outlet price/B

Margin/ bottle

200 ml 24 148 168 20 7 6.16 0.84300ml 24 192 216 24 9 8 1250ml 24 192 216 24 9 8 1600ml 24 450 480 30 2 18.75 1.251.500lit 12 438 480 42 40 36.50 3.502. lit 9 405 432 27 48 45 3.00600ml 24 500 528 28 22 20.83 1.171.2lit 12 468 504 39 42 38.75 3.25Plain can 24 440 480 40 20 18.33 1.67Diet can 24 552 600 60 25 22.50 2.50

DEPARTMENTATION IN HINDUSTAN COCA-

COLA Beverage pvt. Ltd.

The Varanasi unit is divided into many departments for

their smooth working. The plant is basically COBO for 200ml,

300ml&1litre packing and rest of the products are sourcing

from other its COBO & FONO unit. All the departments and

their workings are briefly described as follows:

FINANCE: Finance department performs the activities in

management of Accounts Receivables, claims and expresses,

Fixed Assets management & their depreciation,

Transportation, arrangement of raw material as through supply

chin computer networking management,. Taxation, etc. Above

all these functions checking authority verifies all these

activities and approves it for final actions.

HUMAN RESOUCE: Human Resource department works in

Recruitment & selection, Training & development,

Performance Appraisals, objective setting leading to

management incentive plan, wages &salary administration,

disciplinary actions Actions, Statutory compliance, ISO

documentation assisting in civil criminal litigation, handling of

contract labor. And worker related issues, employee welfare,

community development prefects, policy implementation,

internal& external environment etc.

PRODUCTION: The manufacturing of different types of

Brands of soft drink comes under the production department.

SHIPPING: This department is also termed as Dispatch

section. Goods are receives and dispatched from shipping.

SALES & MARKETING: Sales department takes are of

placement of all brands in right proportion in right time at right

place. Sales executive always dispatches in proportion of

empty receiving and payment terms. The main aim of this

department is that all the brands should be at distributor’s end

and must not be any deficiency of any brand.

STORES: All kinds of material are handled in stores either it

can be raw material for production or materials used in the

office.

QUALITY ASSURANCE: QA department ensures the total

quality in each and every aspect of the organization. This

quality is not only concerned with 9inmdividual department

like production of goods but is concerned with every

functioning of the organization such as hygiene in the

organization like providing the nutrious food from the canteen,

cleanliness in the bathroom not polluting the environment etc

.

CHANNEL OF DISTRIBUTION

COKE BOTTLING Co

WAREHOUSE

FOBODEALERS

RETAILERS

RETAILERS

CONVENTIONAL OUTLET

NONCONVENTIONAL

OUTLET

CONSUMER

VARANASI AT GLANCE

Plant:

Total Area : 26524m2

Construction complete : 1999

Installed capacity : 36000 cases\day

Built up area : 6541 m2

Effluent treatment : In plant (Primary , secondary Advanced

Water source : Bore wells

Water treatment : Batch Treatment Process

Bottling Machinery : KHS, SISHB, HILDEN & DYNATRON

No of permanent Associates : 102

Brands Produced : Thums up, Coco-Cola, Sprite, Limca, Fanta, Maaza, Kinely Soda

Packages produced : 200 ml, 300 ml

Sales :Sales territory : Varanasi,Allahabad,Jaunpur, Azamgarh, Mirzapur , Mau , Sonebhadra , Chanduali , Bhadohi , Districts

Sales volume : 5.5 million unit cases

Market share : 60%

Leading brands : 1- Thums -up 38% , 2- Sprite 18%

Distribution Mode : 100% Indirect VNS-CSD 60.2, SD=52 No of distributor : 165

Outlets Base :35000

Yearly increase in outlet base : 8%

AWARDS , ACHEVEMENTS AND CERTIFICATIONS :

Internal : Most Improved Plane in 2002 (Best of Best India Division)

Summer thunder challenge 2003 (Best of Best India Division)

Productivity Excellence award- 2003

“SM” (Substantially Meets ) rating in Division Quality Systems Audits 2003.QMR YTD 04-89.47 from YTD03-85

The Coco-Cola Quality System Phase 3 Certification in 2003.

Total Products Management System Phase 2 Certification in 2002

External : ISO 9001 : 2000 Certifications in 2003

ISO 14001 : 1996 Certification in Jan 2004

HACCP Certification in April -2004

Market:We supply our brands yo Varanasi , Allahabad , Jaunpur , Azamgarh,

Mau , Sonebhadra , Bhadohi and Mirzapur , chsanduli Districts. The total

Population in the area is 119 lacks, about 18% of the population of Utter

Pradesh . The total no of retailers selling our brands is more than 35000 which

Means there is I retail outlet eve very 340 people . we focus over engriges on

Reduction this number by activating more and more outlet enable us to increase our reach to more and more consumers .

Major District Allahabad, , Jaunpur, Gazipur, Mirzapur, Chandauli, Bhadohi , Sonbhadra, Mau.

Head Quarters Varanasi

No. of outlets 13415

Distribution Gap & Route Efficiency in Varanasi

Distributors in Varanasi

(1) Krishna (2) Shivam (3) Pawn

(4) P.P. (5) Hasan (6) Ohm Distributor

We can take the example of Krishna. The distributor looks after

following route- Lahurabir, beniabagh

There are around 35 outlets on this route. Their are.vehicles for

distribution one can store around…Coates each time & this is

sufficient for carrying on the distribution process.

ANALYSIS AND DATA INTERPRETATION

Ques-1) Do you keep all the varieties of Coca-Cola drinks in comparison of others?

a) 50% b) 75%

c) 100%

Varities of Coca-Cola & Others

0102030405060708090

100

50% 75% 100%

Coca-Cola

Others

Ques-2) Are you satisfied with the delivery and supply of Coca-

Cola products in comparison of others?

a) Extremely Satisfied b) Slightly Satisfied

c) Unsatisfied

COCA-COLA

85%

10% 5% ExtremelySatisfied

Slightely Satisfied

Not Satisfied

Others

80%

15% 5% ExtremelySatisfied

Slightely Satisfied

Not Satisfied

Ques-3) What do you prefer the most?

a) Profit Margin b) Offers & Schemes

0 0

15%

85%

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1 2 3

Series1

Series2

Ques-4) Which type of offers & Schemes do you like most?

a) Premier Offer b) Free Bottle with each Carat

84%

16%

Free Bottle witheach caret

Premier Offer

Ques-5) What percentage do Pet Bottles & Tin form of the total sales

of cold drink?

a) 5-15% b) 15-

25%

c) Above 25%

0%10%20%30%40%50%60%

5-15% 15-25% Above25%

Coca-Cola

Pepsi

Ques-6) Does packaging play an important role in soft drinks?

a) Most important b) Can’t

Say

80%

20%

Most Important

Can't Say

Ques-7) Are you satisfied with the profit margin of Coke in

comparison with others?

a) Fully satisfied b)

Moderately Satisfied

c) Not Satisfied

0%10%20%30%40%50%60%

FullySatisfied

ModeratelySatisfied

NotSatisfied

Coca-Cola

Others

Ques-8) In comparison of other soft drinks, what attract you to

choose Coke?

a) Effective & Timely Distribution b)

Attractive Packaging

c) Offers & Schemes d) Variety Of Flavors

78%

10%

7%

5%

12%

Variety of Flavour

Effective &TimelyDistribution

AttractivePackeging

Offer &Schemes

Ques-9) Are the customers satisfied with the soft drinks of Coke in

comparison of others?

a) Fully Satisfied b)

Moderately

c) Not Satisfied

0%20%40%60%80%

100%

Coca-Cola

Others

Ques-10) Are you satisfied with the advertisement and promotional activities of Coca- Cola in comparison of others?

a) 100% b)

80%

c) 50%

60%

25%

15%

70%

20%

10%

0% 20% 40% 60% 80%

100%

80%

50%

Others

Coca-Cola

Ques-11) Are the salesman adequately trained while dealing with

your requests & queries?

a) Adequately Trained b)

Lack of Proper Information

Ques-12) Are you satisfied with the repair & maintenance facilities

of the company?

a) Fully Satisfied b)

Slightly Satisfied

c) Not Satisfied

Ques-13) How do you rate Coca-Cola in comparison to others?

a) Better b) Equivalent

c) Excellent d) Not so good

FINDINGS

Some of the important findings and observations have been listed below:

i. The most important and satisfying observation was that, COCA-COLA had approximately 65% market share in the soft drinks market in Meerut Road, Murad Nagar and Modi Nagar.

ii. Soft drink business’s behavior is not governed by brand loyalty so the availability of the right brand, at the right place, at the right time is the key for winning consumer in soft drink business.

iii. The present distribution system of COCA-COLA is the best in these areas and is one of the major strengths of COCA-COLA. The enhancement in the distribution network would definitely increase the market share of COKE.

iv. The retailers played a very critical role in incrementing the sales volume of the product and the had to be kept satisfied in order to increase the market share by offering better schemes, discounts, display materials such as VISI’s, racks, counter, signage, wall paintings and better amount for purchase of shelf space for display

v. The cut throat competition between COKE and PEPSI had lead to a never ending cola war and price war which has brought down the profit margins which is one of the major grievances apart from the common complains pertaining to schemes, incentives and display materials.

vi. The repair and maintenance and also replacement facilities of the company are not very effective as retailers face problem due to impaired stabilizers, cooling capacity of the fridges and the damage product.

SWOT ANALYSIS

Swot analysis provides information that is helpful in matching the firms resources and capabilities to the competitive environment in which it operates. As such it is instrumental in strategy formulation and selection as it is based on its strengths, weakness, opportunity and threats.

Swot analysis is basically used as an important technique through which a company can know its positive features and can overcome its negative aspects by properly scanning the business environment in which it operates.

THE SWOT A NALYSIS OF COCA-COLA CAN BE DONE AS FOLLOWS

STRENTHS

A firm’s strengths are its resources and capabilities that can be used as a basis for developing competitive advantage. The strengths of Coca-Cola can be listed as following:

The company has a large product profile providing almost all the flavors preferred by the consumer.

The products are available in different types of packs that can be easily accessed and handled.

Coke has a wide reach and penetration in the market as it has a favorable access to distribution networks.

Coke provides OYA scheme of brand name product so every retailer doesn’t keep hesitation to open new out let because they have thought not only the best chilling but also happy life of OYA (Own Your Assets).

The supply and demand of various products is constantly monitored in regular intervals by every depot head so the retailers get timely supply of Coke products from the distributor.

Coke posses a good infrastructure including the transportation vehicles, which assist in widening its reach

It enjoys a strong brand preference and reputation among the customers.

The supply of the products by the company depot to the retailers is quick and on time at the required time due to good infrastructure facilities.

The company provides a wide range of services with the help of its educated sales executives, market developers and repair and maintenance facilities.

The company is offering various facilities to its customers to promote proper display and visibility of its products.

WEAKNESS

The absence of certain strengths may be viewed as a weakness of the Coca-Cola. They can be stated as-

The distribution network of the company is weak as salesman start working late in the morning

The company has insufficient indirect reach.

Company does not provide the requisite training to its salesmen to handle all the queries of the retailers.

Company emphasizes more on distributor so every scheme goes to in hand of distributor so retailer gets frustrated.

As per the response of some retailer company dos not provide much offers and scheme and also lesser in profit margin in comparison to other brands.

OPPORTUNITY:

Proper external environmental analysis may reveal certain new opportunities for growth and profit of Coca-Cola that can be listed as follows-

High growth rate of Soft Drink market.

Coke can modify the packs for its products that can be easily handled by the consumers making it look more attractive and refreshing.

Introduction of a new product/flavor can create a wide area of the market.

The company can increase its reach by increasing the number of empties in the market.

The company should provide few things with its pet bottles to attract consumers, which will help to promote its sales just like Pepsi.

THREATS:

The aggressive nature of the competitors is the main threat to the company.

Others competitor provides a wide range of schemes to the retailers, which diverts their preference, as they are interested only in profits.

The distribution network of its competitors is more flexible.

The company faces a strong competition from Pepsi besides other juice manufacturing companies like Dabur, Priya Gold.

Retailers problem aren’t solved fast on time, so retailers face problem during the season and next time they stand at a chance to switch over to its competitor

SUGGESTIONS

1. The most important thing or coke is to strengthen its distribution

network in this region so that it can increase its supply to fulfill

the demand of the customer .

2. The company needs to change its policies and introduce various

facilities like credit facilities ,damage claim etc.to facilitate its

retailers and tackle the competition.

3. To increase the market share the company should go for massive

ad

campaign through placing banners and hoardings at public

places (like market ,Railway stations, Bus stands)running slides

in theatres and making full use of electronic and print media.

4. The marketing executive should make a regular visit in the

market so that

they are in regular in touch with the market situation.

5. The company should introduce new flavor to generate curiosity

in the

market .

6. To increase the sales the company should introduce various

offers/

schemes for the customers.

Conclusion

Delivery van is up to mark for delivering of coke so, we divide the route for all

the delivery van so the coke will go to every retailer and it is consumed by the

customers.

Freeze is unrepaired up to two weeks and above.

All brand is not available at all retailers.

Due to crowed or traffic jam it is not possible to delivered the coke products to

retailers and sometimes customers.

Most of the retailers are satisfy with S.G.A.

Cooling capacity plump important role as for as S.G.A.in concern.

There is a need to increase the after sales service to the existing rout efficiency

even though the after sales service in very good.

BIBLIOGRAPHY

A).Books:

Research Methodology C.R.Kothari

Marketing Management Philip Kotler

Marketing Management V.S. Ramaswamy&

S. Namakumari

Sales Management Richard r Still

Edward w Cundiff

Norman A.P. Godvind

B). Magazines :

Business World

Business Today

C). Web Site:

www.coco-cola.com

www.google.com