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Project Report on Sales and Distribution Management
Submitted to:
Prof. Makam Balaji
Submitted by:
Saurabh Suman
Samyak Raj
Kaustav Bhowmick
Aditya Maheshwari
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ACKNOWLEDGEMENT
We would like to take this opportunity to thank all the project members who have helped in
bringing this project to a successful completion.
We express our gratitude to the Marketing Dept. of ,IBS Hyderabad for giving us the opportunity
to work on such an interesting project. It has been a rewarding experience for us.
We are grateful to our guide Prof. Makam Balaji for his Continuous assistance, suggestions
and encouragement and for guiding us right from the commencement to the completion of the
project.
We would like to thank those employees of Coca Cola without whose co-operation this project
would not have been completed. Finally, we would like to appreciate the coordinated effort of
the team in the making of this project.
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Introduction
Coca-Cola is a very popular cola (a carbonated soft drink) sold in stores, restaurants and
vending machines in more than 200 countries. It is also known as Coke. Coke is one of the
worlds most recognizable and widely sold commercial brands and. The major rival of coke is
major rival is Pepsi.
Coca-Cola was invented on May 1886 by Dr. John Stith Pemberton in Jacob's Pharmacy in
Atlanta, Georgia. The first sales of coke were made from that pharmacy. For the first eight
months only nine drinks were sold each day. The name Coca-Cola was suggested by
Pemberton's book-keeper, Frank Robinson. He penned the name Coca-Cola that is famous
today. Coca-Cola was sold in bottles for the first time on March 12, 1894, and cans of Coke first
appeared in 1955.
The Coca-Cola Company merged some of its company-owned operations with two large
ownership groups that were for sale, the John T. Lupton franchises and BCI Holding
Corporation's bottling holdings, to form Coca -Cola Enterprises Inc. The
Company offered its stock to the public on November 21, 1986. The adjusted price per share is
$5.50. The company became stronger when after merger with the Johnston Coca-Cola Bottling
Group, Inc. (Johnston) in December 1991. Presently The Coca-Cola Company is the largest soft
drink company in the world. Every year 800,000,000 servings of just "Coke" are sold in the U.S
alone.
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Vision
To achieve sustainable growth, the company has established a vision with clear goals.
Profit: Maximizing return to shareowners while being mindful of our overall responsibilities.
People: Being a great place to work where people are inspired to be the best they can be.
Portfolio: Bringing to the world a portfolio of beverage brands that anticipate and satisfy peoples; desires and needs.
Partners: Nurturing a winning network of partners and building mutual loyalty.
Planet: Being a responsible global citizen that makes a difference.
Mission
It declares the purpose as a company and serves as the standard against which the company weighs the actions and decisions. It is the foundation of company manifesto.
To refresh the world in body, mind and spirit. (Market, Customer, Philosophy)
To inspire moments of optimism through the brands and actions. (Products)
To create value and make a difference. (Self concept)
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The Corporate Objective
Strategic Goals
These strategic goals are decide by the top management with consultation by the parent
company head quartered at Singapore. They are:
To continue to be an organization providing the quality products to the valuable customers.
To select and retain the professional people for the organization.
To project an outstanding corporate image.
To satisfy the customer through extra ordinary service and an excellent service along with the
complete tactical and operational support.
Tactical Goals
The top management of the company on an annual basis devises these goals together with the
consultation of the lower level employees.
Operational Goals
Operational goals are decided by the top management in consultation with the lower level
employees. They are following the concept of management by objectives (MBO). Each
employee is assigned its goals and is told what is expected of him and then he is evaluated on the
basis of certain rules and regulations followed evenly by the company.
Product Line
The Coca-Cola Company has on occasion introduced other cola drinks under the Coke brand
name. The most famous of these is Diet Coke, which has become a major diet cola. The other
cola drinks are also exists such as Cherry Coke, Coke Zero, and Vanilla Coke. The Coca-Cola
Company owns and markets other soft drinks that do not carry the Coca-Cola branding, such as
Sprite, Fanta, and others.
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Coca Cola Company deals mainly in soft drink industry and these are some of its major brand. It
also deals in soda and mineral water through the brand name Kinley.
Diet coke: Diet coke was born in 1982 and became the no. 1 sugar free soft drink in diet
conscious America. It is also known as coca cola light drink in some countries. Now, Diet coke
is the no. 3 soft drink in the world.
Thums up: Thums up is known as strong fizzy taste. Thums up was introduced in 1977 and it
was acquired by coca cola company in 1993.
Sprite: Sprite is sold more than 190 countrues and it is the no. 4 soft drink in the world. Today.
Sprite is one of the fastest growth soft drink in the world.
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Limca: the soft drink first launched in 1971 and from then it is one of the thirst choice of
millions of customer.
Fanta: over the year fanta has occupied a strong marketplace. Fanta stands for its vibrant colour,
tempting taste and tingling bubles. This drink is very favourite to the female consumers.
Maaza: Maaza launched in 1976 and in 1993 coca cola aquire maaza. It is dominates in fruite
drink category.
The PESTLE Analysis
A scan of the external macro-environment in which the firm operates can be expressed in terms
of the following factors:
Political Economic Educational Social Technological
Political Analysis for Coca-Cola
The following are some of the factors that could cause Coca-Cola company's actual results to
differ from the expected results,
Changes in laws and regulations, including changes in accounting standards, taxation requirements, (including tax rate changes, new tax laws and revised tax law
interpretations) and environmental laws in domestic or foreign jurisdictions.
Changes in the non-alcoholic business environment. These include, without limitation, competitive product and pricing pressures and their ability to gain or maintain share of
sales in the global market as a result of action by competitors.
Political conditions, especially in international markets, including civil unrest, government changes and restrictions on the ability to transfer capital across borders.
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Economic Analysis for Coca-Cola
Economic factor can affect the consumption of soft drinks. When there is economic crisis all
over the world people buy their basic need products such as food, cloths etc. As a result of this
the sales of coke goes down. But as the economy recover slightly consumers are now resuming
their normal habits, going to the malls, car shopping, and eating out at restaurants, it create
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positive impact on the sales of coca cola. Again, If the economic conditions of the country is not
that strong and Coke increases its Price in this situation. Then it would impact highly negative.
And inflation is also not a good position for any countrys production point of view. It also
impacts highly negative in the Cokes production.
Educational
The Coca-Cola Company has always believed that education is a powerful force in improving
the quality of life and creating opportunity for people and their families around the world. All
over the world, the coca cola company is involved in innovative programs that give hard-
working, Knowledge-hungry students books, supplies, places to study and scholarships.
Social Analysis for Coca-Cola
As people are more health conscious day by day, many of them are switching to bottled water
and diet colas instead of other alcoholic beverages. Consumers from the ages of 37 to 55 are also
increasingly concerned with nutrition. Since many are reaching an older age in life they are
becoming more concerned with increasing their longevity. This will continue to affect the non-
alcoholic beverage industry by increasing the demand.
Technological Analysis for Coca-Cola
Technological change creates opportunities for new products and product improvements and of
course new marketing techniques. Some factors that cause company's actual results to differ
materially from the expected results are as follows:
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The new technology of internet and television which use special effects for advertising through media. They make some products look attractive. This helps in selling of the
products.
Introduction of cans and plastic bottles have increased sales for Coca-Cola as these are easier to carry and one can bin them once they are used.
Due to introduction of this machineries the production of the Coca-Cola company has increased vastly then it was few years ago.
SWOT Analysis
Strength
Worlds leading brand
The company has a leading brand value and a strong brand portfolio. . Business-Week and Interbrand, a branding consultancy, valued Coca-Cola at $67,000 million in 2006.
The company owns four of the top five soft drink brands in the world: Coca-Cola, Diet
Coke, Sprite and Fanta. Strong brands allow the company to introduce brand extensions
such as Vanilla Coke, Cherry Coke and Coke with Lemon. Coca cola has made huge
amount of investment in promotional activities all over the world. Consequently, Coca-
Cola is one of the best recognized global brands.
Large scale of operations
Coca-Cola has a large scale of operation with revenues in excess of $24 billion. Coca-Cola is the largest manufacturer, distributor and marketer of nonalcoholic beverage
concentrates and syrups in the world. Coca-Cola owns and operates 32 principal beverage
concentrates and/or
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syrup manufacturing plants located throughout the world. The companys large scale of operation allows enhancing its revenue.
Strong revenue growth in three segments:
Coca-Colas revenues recorded a double digit growth, in three operating segments. These three segments are Latin America, East, South Asia, and Pacific Rim and Bottling
investments.
Revenues from Latin America grew by 20.4% during fiscal 2006, over 2005. During the same period, revenues from East, South Asia, and Pacific Rim grew by 10.6% while
revenues from the bottling investments segment by 19.9%. Together, the three segments
of Latin America,
East, South Asia, and Pacific Rim and bottling investments, accounted for 34.8% of total revenues during fiscal 2006. Healthy revenues growth rates in these segments
contributed to top-line growth for Coca-Cola.
Global Distribution
Coca cola is available in each and every part of the world as it is operating globally in more than 200 countries.
Innovation It always launches innovative products like diet coke, vanilla coke and many others.
Research and development:
Coca cola has strong research and development department.
Brand loyalty
Coca cola enjoys the brand loyalty from the customers
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Weakness
Negative publicity
The company received some sort of negative publicity. For example, In India during September 2006 The Company was accused by the Center for Science and Environment
(CSE) of selling products containing pesticide residues. Coca-Cola products sold in and
around the Indian national capital region contained a hazardous pesticide residue. These
pesticides included chemicals which could cause cancers, damage the nervous and
reproductive systems and reduce bone mineral density. Such negative publicity could
adversely impact the companys brand image and the demand for Coca-Cola products.
Decline in cash from operating activities:
The companys cash flow from operating activities declined during fiscal 2006. Cash flows from operating activities decreased 7% in 2006 compared to 2005. Net cash
provided by operating activities reached $5,957 million in 2006, from $6,423 million in
2005. Coca-Colas cash flows from operating activities in 2006 also decreased compared
with 2005. Declining cash from operating activities reduced availability of funds for the
companys investing and financing activities.
Opportunities
Possible growing opportunities
In a country like India the per capita consumption of coca cola per year is the lowest in the world that is only 6 per person. So, there are a opportunity of enhance market share.
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Coca Cola Bottling System
It also allows the company to take advantage. Most of the bottling companies are under the control of coke which gives that much of flexibility in the pricing strategy where the
rival cola giant pepsico does not have its own bottling companies. So, they can not enjoy
that much of flexibility the pricing strategy of PepsiCo.
Expansion into new market
Coke is enjoying so good brand name. So if they enter in any other industry with same brand name it can also succeed in that industry
Merge with other global business is another option in front of them to expand their business.
Threats
The company faces intense competition in various markets from regional as well as global
players. The company also faces competition from various nonalcoholic beverages including
juices and nectars and fruit drinks.
Dependence on bottling partners
In 2006, approximately 83% of its worldwide unit case volumes were produced and distributed
by bottling partners in which the company did not have any controlling interests.
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Sales Department Structure:
Sale is the pinnacle activity involved in selling products or services in return for money or other compensation. It is an act of completion of a commercial activity. The "deal is closed", means the customer has consented to the proposedproduct or service by making full or partial payment (as in case of installments) to the seller.
Sale is the pinnacle activity involved in selling products or services in return for money or other compensation. It is an act of completion of a commercial activity. The "deal is closed", means
the customer has consented to the product or serviceproduct or service by making full or partial payment (as in case of installments) to the seller.
A sale is completed by the seller, the owner of the goods. It starts with consent (or agreement) to an acquisition or appropriation or request followed by the passing of title (property or ownership) in the item and the application and due settlement of a price, the obligation for which arises due to the seller's requirement to pass ownership, being a price the seller is happy to part with ownership of or any claim upon the item. The purchaser, though a party to the sale, does not execute the sale, only the seller does that.
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To be precise the sale completes prior to the payment and gives rise to theobligation of payment. If the seller completes the first two above stages(consent and passing ownership) of the sale prior to settlement of the price the sale is still valid and gives rise to an obligation to pay.
At coca-cola India direct sales as well as dealer to dealer sales too. Hierarchy wise roles are classified and each and every employee is supposed to fall in line for the same.
The General sales manager report to the general Manager.
Under General Sales Manager there are National Sales Manager, Local sales manager, retail sales manager and operations support manager
Under the local sales manager, various sales executives are working.
Marketing & Sales policies
Marketing strategy:
Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. A marketing strategy should be centred around the key concept that customer satisfaction is the main goal.
Numero Uno Tamil movie star Vikram introduced as the brand ambassador for Coke Launches a new TV commercial with superstar Vikram -Cool Drink Na Coca-Cola Introduces a special PET mobile bottle on the occasion Rolls out an innovative packaging in a returnable glass bottle(RGB) for Diet Coke Expands the hot tea & coffee retail business with the introduction of over 1,000
dispensers across key metros in India
Maaza to be launched in a new PET pack for home consumption Fanta Spin- Pudhu Butti, Fulla Naughty - innovative shape, an international success.
TVC on air with brand ambassador Trisha and Rani Mukherjee
Thums Up Piyoge? Ninja Chalaoge? Hai Dum?- Four winnersto ride home the Kawasaki NINJA ZX 6R - one of the most powerful superbikes in the world
Limca re-launched with a fresh new positioning - Mazaa Taazgi ka.
Target:
1. Achieving sales volume- Ensure month on month achievement of targeted SKU wise premix volumes. Track & monitor distributor wise &machine on machine premix volumes.
2. Achieve customer targets Achieve customer satisfaction and addressing their grievances targets. Continuously track machine on machine performance indices
3. Drive bottle placements as per month wise coke phasing Continuously generate leads & convert them in to ideas for sales.
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.4. Leading the outsourced sales team Set & monitor performance of the outsourced sales team on a regular basis. Ensure high motivation levels for the entire team.
5. Ensure effective on ground communication To champion localconsumer insights and work with Trade Marketing to develop & executerelevant communication. Track & monitor effectiveness of on groundcommunication and engage elements.
6. Relationship Management Manage & develop relationships with the accounts and ensure best in class service standards.8. Reporting & administration Ensure that all reports i.e. Sales reports,fridge installation etc. are maintained & sent to reporting manager as per set norms & at set frequency. Ensure compliance to company norms & policies for all T&E, distributor claims etc
Sales Budget
Sales budget at Coca-Cola holds a key position in marketing strategies. As far as Chennai market is concerned, the sales budget has been dependant on the variety of print media ads and audio video advertisements. Brands are being endorsed by the celebrities, which also cost the company. The sales budget for Chennai region is pegged at 17 crores INR.
Routing & Scheduling:
Routing
is the process of selecting paths in a network along which to send network traffic. Routing is performed for many kinds of networks, including the telephone network, electronic data networks (such as the Internet), and transportation (transport) networks. This article is concerned primarily with routing in electronic data networks using packet switching technology.Routing, in a more narrow sense of the term, is often contrasted withbridging in its assumption that network addresses are structured and that similar addresses imply proximity within the network. Because structured addresses allow a single routing table entry to represent the route to a group of devices, structured addressing (routing, in the narrow sense) out performance structured addressing (bridging) in large networks, and has become the dominant form of addressing on the Internet, though bridging is still widely used within localized environments.Routing in terms of FMCG industry sheds light on the supply chain side of the aerated drinks. How the bottles are delivered across the territories. There are two big warehouses for the north and south Chennai, from which the bottles are sent across different locations.
Scheduling
is the process of ensuring whether the delivery of consignment will be on time or not. At Coca-Cola India, for chennai operations theyschedule as per the market and dealer requirements.
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Organizational Analysis:
Coca-Cola vision statement:
We will become the best and the biggest anchor bottler in the world
CCBPL has a very flat hierarchy, consisting of just three layers. Thus, the top management handles most of the goals setting and planning activities. The objectives of this company can be classified as:
STRATEGIC GOALS
The strategic goals are considered when company is thinking of the long-term objectives but at coca cola strategic objectives and goals are set up for three years. These strategic goals are decide by the top management with consultation by the parent company head quartered at Singapore. However, they are reviewed every year in the annual meeting to make sure that they are in line with the changing environment. They are:
To continue to be an organization providing the quality products to the valuablecustomers.
To select and retain the professional people for the organization.
To project an outstanding corporate image.
To satisfy the customer through extra ordinary service and an excellent service along with the complete tactical and operational support.
5.2 TACTICAL GOALS:
The top management of the company on an annual basis devises these goals together with the consultation of the lower level employees. Then each departmental director is given these annual
tasks that then subdivide it on the quarterly or monthly basis to have a proper check to ensure that these objectives are achieved, mainly through marketing, is the job of the director of each division. For this year, these goals are:
To increase the revenues by 20% as compared to last year.
To increase the total retail customers by around 10%.
To increase the market share by 5%.
To reactivate the discontinued customers by 30%
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OPERATIONAL GOALS:
Operational goals are decided by the top management in consultation with the lower level employees. They are following the concept of management by objectives (MBO). Each employee is assigned its goals and is told what is expected of him and then he is evaluated on the basis of certain rules and regulations followed evenly by the company.For example: a sales man is given following tasks, duties and certain targets: Each salesman has to oversee around 100-125 outlets. The frequency of visits to each outlet depends upon the sales of that particular outlet. Normally, a salesman has to visit a single outlet thrice a week i.e. every alternate day. This means that a salesman visits at least 20-30 outlets per day.
The salesman has three basic functions to perform.
To find new customers,
To retain existing ones,
To bring back the discontinued accounts.
Each salesman has to bring in at least three new accounts every month. These may either be new customers or the reactivation of the discontinued accounts Sales manager is made responsible for the performance and achievement of operational goals and is assigned to set certain milestones for the salesman so as to give him proper feedback, which definitely helps the salesman achievement of the above-mentioned goals.
DECISION-MAKING:
The decision-making process in CCBPL is centralized. The model used is classical, whereby thetop management takes their time while making decisions and explore and evaluate all the possible alternatives before choosing the rationally economic and feasible solution. Programmed decisions are made only by the top management with no consultation what so ever with the line managers while the daily and routine decisions are made by the line managers at the middle level with the prior permission or approval from the general manager.
Decisions, which are normally taken at the top management, are related to
The package positioning
Trade discounts
Advertisements
Price reductions
Distribution
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While recruiting new employees, the top management approves the vacancies and asks the Human Capital Department to conduct the written test and this test normally is conducted for the employees at the lower level. Then prospective applicants are short listed through the interview process. Then the Business and operations manager or general manager personally interviews the employees and then makes the final decision about the selection himself.
Hence, the style of decision-making followed by the CCBPL model, is AII. That is, the decisions are made on the basis of the inputs provided by the lower level employees and the managers at the middle management level. Top management asks for the suggestions and ideas of his subordinates and then takes the final decision himself. However, the remaining decisions, which are mainly related to the daily operations, are made by the respective managers who are eventually made responsible for the results.The management is very much cooperative and encourage its employees to come up with new ideas related to their duties and the work they do so as to increase the overall efficiency of the organization and eventually increasing the profits.
Sales Department:
The sales department of the Coca Cola Company is to coordinate the selling program. They also have to make the distribution methods, etc. Also, decide how much to sell and how much to store in the warehouse and to choose the transporting method which is the most cost efficient and the quickest way.
Staffing:
Recruitment is normally done on the required positions and not on the standby basis.Recruitment starts whenever a supervisor or sales manager needs a salesperson and it is first approved by the general manager before sending it to the human resources department. All the vacancies are first internally advertised so that all the employees who fulfill the requirements can avail this opportunity. If there arent any suitable persons for a particular job then human resource department search its data bank and if there is no suitable person then at last it is advertised in the newspaper but it is rarely the case at coca Cola for the sales man. Selection is based on different criterion for different positions. Education requirements are the first and the most important and are the first part of the screening of the personnel. After the screening stage,applicant is called for the aptitude test. For a salesman job simple arithmetic and generalknowledge is tested. Know how of English is also necessary in some cases. After passing the aptitude test applicant is asked to appear for an interview. This interview is normally carried out by the sales and human resource department. Purpose of this interview is to confirm the data and claims, which the applicant has produced and made. If the applicant is selected, he is asked for four sureties or any other references, which he can make and sometimes, human resource department also like to confirm from their Ex-Employers about the conduct and the reason for leaving of the applicant.
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Selection:
The selection process will vary depending on the position applying for, as one process cant fit all the different roles at CCBPL. However, in most cases a combination of any of the following tools will be used:
Interview
Group exercises
Presentations
Psychometric tests
Role plays/Situational Exercises
Interview
Training:
At Coca cola on the job training is given the utmost importance. At first a sales man is given information about the product, sales environment and company policies and procedures. Ethical behavior is emphasized most so as not to create any sort of bad habits which can cause great problems for the company. Normally a new sales man is supposed to work under another salesman to learn the basics of selling techniques and the overall environment in which he will be working. A salesman is then allowed to work under the salesman but he is askedperformall the operations by his own. These include filling out the route card, dealing withthecustomers, communicating with to loader, cash management, setting the visi cooler and the next days order to be loaded. After doing all this if has any problems in learning then he is guided by salesman, market developer, and sales manager if required.
Apart from this on the job training, the company also has some in-house training facilities. The company has a sales hall in which all the sales personnel are given some tips regarding the changes in the selling environment and how to improve efficiency and efficacy. These tips are normally given by the general manager.Coca Cola also arranges some type of seminars, workshops and modules related to the sales management, Forecasting of the daily sales, merchandising, selling skills, supervisory techniques and other areas related to the sales.
coca Cola does not have any library and special trainers but they do have the separate space for the training and they also use some sort of videos to elaborate and show the examples of effective selling skills and ,techniques.To maintain the professional employees company has a policy of promotion from within.Promotions are based on the performance, which is measured very objectively. Apart from this the company pays its employees more than the industry wages. Not only the wages and
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salary but different other benefits are also given to employees to motivate and retain them in the organization. The company also has an effective incentive plan.
LEADERSHIP STYLE:
Coca-Cola gives great importance to its General Managers, because they hold a top position in the organization. They are required to take major administrative and general decisions and also these managers are responsible for leading and motivating their subordinates and staff people.
Increasing business with a coordinated approach by helping each other in its operations.
Encouraging the employees to give new ideas so as to increase the customer satisfaction.
Due to the presence of delegation and participation the Democratic Leadership Style is used since managers have to run the organization by involving their workforce and considering them as an important part of the organization. Sales and Marketing Departments make the use of teamwork to keep the interest of their fellow employees developed. Juniors are not consideredinferiors rather they are given a good dosage of experience and help that they start working on their own without the words of their managers. Performance awards are also there for lower level employees so that they perform at their best and work at least to get the awards.
MOTIVATION:
As mentioned earlier promotions are given on performance in CCBPL, so the employees gets motivated to work hard and achieve that level of performance so that they may prosper within the organization. Also amount of wages is relatively higher than a normal industry wage that creates a major difference not only the old employees work faithfully but the new ones are motivated to become part of such a good organization whose main priority is lower level employees. Managers give their teams timely feedback on their teams performance and keep them motivated by helping them personally without any rules and restrictions also those who want to come forward are given a shoulder, a step to make their dream come true.
To recognize and appreciate the good work by the employees, trophies, cash prices andexcellence awards are also given. Every month the list of top ten performances given by the employees is issued by EXCOM, to recognize and laud the efforts and boost their morals for good work.
Stress Management:
There is no formal implementation of stress management policies in CCBPL. But because they want maximum output from their employees, so they provide them different entertainment and recreational activities which include trips, tours, occasional parties and gatherings are also held where people come with their families. Every month, in the each territory, the birthday party is arranged where all the employees having different designations including office boy, kitchen staff are invited to cut the cake and celebrate their birthday with the whole staff.
COMMUNICATION:
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Open culture is the basis of communication in the organization. Employees are consulted by the top management for the decision process and the chain moves on. Managers also cop up with their teams and their offices are open 24/7 for those who want to remove any confusion.Sometimes even the Grape Vine structure is used too so that the management can get the feedback of the employees about their working, which helps managers a lot in making further decisions.
Controlling:
control is based on evaluation which is based on the very objective basis. Certain criteria are fixed in advance and if these criteria are not met then the employees are asked and evaluated for the reasons and corrective actions are taken by the respective managers. Different departments have different criteria and different reporting and controlling system .The reporting, evaluation and control system of the department are as follows:
Sales persons reporting system:
Every sales person directly reports to the market developer of that area. A sales person is supposed to give him a daily report of his activities and he is free to ask for any kind of assistance from the market developer.
Every sales person is given an attendance punch card , which records an arrival and departure time. He is also given a route call card, which he is supposed to fill out. This card includes about all the details of the visiting outlets, time spent on these outlets, sales made on these outlets, time during travelling, names of the loaders and sales persons time in and time out of the vehicle.
Apart from this a sales person is also given to fill up for the next days order to be loaded in the truck. This basically tells about the total sales of the sales man according to the brand and size of the product. This basically is used by the human resource department to evaluate the performance and calculating the total salary of the salesman.
Sales persons evaluation system:
Every sales persons evaluation is done on quarterly basis. Evaluation helps the company to promote the people to the higher levels of organization. This evaluation also motivates the salesman to work hard to get the promotion or atleast the monetary rewards, which are given not only to the best salesman but the best market developer and the best sales manager of the year.
Performance is evaluated on the basis of performance development plan. Performance is measured on the basis of achievement of targets, which are set and communicated at the very beginning of the year to each sales manager, each quarter to each market developer, every month to each sales person. This performance development plan evaluates the sales people on the basis of call slips ,Route call, call completion, effective and productive call ,attendance, growth in sales, market development and punctuality of salesman.
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Strategies
Positioning Strategy
It means that a company tries to give image to its product in the mind of the customers. To give
a true and positive picture of the product is the best positioning. The company should promote
its good points or comparative advantage which it has over its competitor.
Differentiation Strategy
There are many bases on which a product can be differentiated but Coke has differentiated its
product on the following base:
Product Differentiation: Coke differentiates its product from its competitors on the basis of
brand, quality and taste.
Image Differentiation: Logo is used for image differentiation. Logo is what establishes a brand
name in the consumer mind. It is the brands identification, signature and image.
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Promotional Strategies
Price Strategy Trade Promotion:
Coca Cola Company gives incentives to middle men or retailers in way a that they offer them
free samples and free empty bottles. By this these retailers and middle man push their product in
the market. That's why coca cola seen more in the market. They have a good sale in the market
because according to the expert which product seen more in the market that sells more."Seen as
sold".
Sale Promotion
Coca Cola Company also does sponsorships with different college and school's cafes and
sponsors their sports events and other extra curriculum activities for getting market share.
Normally they keep their freezers near the entrance of the stores. Sale Promotion Company also
does sponsorships with different college and school's cafes and sponsors their sports events and
other extra curriculum activities for getting market share.
Getting shelves
Coca Cola gets or purchase shelves in big departmental stores and display their products in those shelves in that style which show their product clearer and more attractive for the
consumer.
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Different sales channel:
Coca Cola Company makes two types of selling
*Direct selling
*Indirect selling
Direct Selling: In direct selling they supply their products in shops by using their own
transports. In this type of selling company have more profit margin.
1. Indirect Selling : They have their whole sellers and agencies to cover all area. For
providing their product in good manner company has provided infrastructure these
includes, Vizi cooler, Freezers, Display racks etc.
Advertisement Strategies
Coca Cola Company use different mediums for advertisement.
Print media
Pas material
TV commercial
Billboards and holding
Competitive strategies
Coca-Cola is a dominating force in the beverage industry and sets a very high standard of
competition. Research shows that its trademark is recognized by over 94% of the worlds
population. There are many factors contributing to Coca-Colas success:
Marketing:
Coca-Cola was among the pioneers of advertising techniques and styles used to capture an
audience. It was around 1900 when Coca-Cola began presenting their signature drink as a
delicious and refreshing formula. This slogan has been repeated for over the last 100 years for
selling Coke all over the world. The image has been subconsciously installed in our brain by the
advertising campaigns.
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Innovation:
Coca-Cola has been able to survive in the ever changing market because of its ability to
systematically innovate and deliver new products. It was apparent that the market was changing
and in order to keep up with these changes, Coca-Cola had to move from a single core product to
a total beverage company. The company began operating in a decentralized environment that
was unfeasible in previous years. Now Coca- Cola offers nearly 400 different products in and is
still dominating the beverage industry. This is made possible by the companys ability to
innovate and adapt to changing markets.
Factors Affecting Sales
There are so many factors, which affect the sale of coke. Here we are discussing two major
factors which effects coke.
Per capita income Weather
Per Capita Income
This is major factor that affects the sale of this soft drink. Because, every passing year the
budgets are becoming very strict and tight in order to purchase things. So the disposable incomes
of the people are coming down. They spend heavily on rents, utilities, and education and basic
necessities and after that when they get extra money they think about this soft drink. So the
decreasing per capita income effects badly in selling and production of this soft drink.
Weather
Weather is also the major factor in effecting the Cokes selling. This is underdeveloped market
so the cokes consumption in summers is 60% and in winters is 40%.
Threats from Competitors
Price is the major threat. Though the price goes certain beyond the exact price whether come
down or go higher its effects the consumption of soft drink. Because when the prices go higher
people go for the substitute of coke i.e. Pepsi and when price goes down the people think that
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there is must be some thing wrong in it. It all depends on customers perception. So, price is an
important factor for the success of the company.
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TARGET MARKET OF COCA-COLA
Coca-Cola takes every customer as target and potential who is thirsty.
All age groups are being targeted but the most potential is the age group from 18-25 that covers around 40% of total age segment.
AGE: The target market for the Coca-Cola is based on age. The audience of Coca-Coal is youngester or youth.
It has wide range of targeting. It ranges from the age of 15-25 and reaches to 40.
Their targeting is not based gender but the results show that both genders like this product and use it.
GENDER: Coca-Cola segments pakistani market with a percentage ratio of 58% females and 42% males.
Life style; busy life style( face shortage of time) and mobile generation.
Family; dependent on their family.
Occupation; students and family oriented people.
NATURE: Fun lovin and entertainment loving.
SOCIO ECONOMIC STATUS: Upper lower and lower class
MARKET SEGMENTATION OF COCA-COLA
Coca-Cola serves its products using mass market technique. Which obviously falls in undifferentiated marketing and undifferentiated marketing means no segmentation, but
there are minor factors on which we can say that the coke segments its products and then
targets the customers somehow.
These factors are as follows
GEOGRAPHIC SEGMENTATION.
INTERNATIONALLY: Coke segments its products country wise and region wise.
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The most important things is the taste and quality.
It varies according to the taste and income level of the people in that country. I.e.: third world countries are given low quality and taste.
CLIMATIC: In coke marketing, main idea is to serve it cold, so we that they focus on hot areas of the world.
i.e.: middle east etc and their sale increase in summer.
LOCALY: In pakistan the coke segments more in urban and suburban areas as compare to rural areas.
DEMOGRAPHIC:
AGE:. Coke segments the small children introducing tastes like vanilla, lime and cherry. They focus children from 4-12.
Coke specifically target more young than older.
FAMILY TYPE:. Coke introduces its economy pack and thats how the focus family and groups.
INCOME:. Coke segments different income levels by packing.
For small income people it has small returnable glass bottle.
For middle people it has small non-returnable bottle.
For higher income people it has Coke Tin.
PSYCHOGRAPHIC.
All psychographics variables the social class, lifestyle, occupation, level of education and personality Coke segments everyone.
But again its there packaging which is different for different consumers.
BEHAVIORAL:
OCCASION:. Coca-Cola segments different occasions which are celebrated in the country.
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Basant has become an international event identity of the culture of pakistan.
The crdit for making celebrations available for almost everyone largely goes to Coca-Cola Company.
SALES STRATEGIES OF COCA COLA
In order to achieve this mission, Coca Cola create value for all the constraints it serve, including consumers, customers, bottlers, and communities. The Coca Cola Company creates value by executing comprehensive business strategy guided by six key beliefs:
1. Consumer demand drives everything Coca Cola do.2. Brand Coca Cola is the core business3. Serve consumers a broad selection of the nonalcoholic ready-todrink beverages they want to drink throughout the day.4. Be the best marketers in the world.5. Think and act locally.6. Lead as a model corporate citizen.
The main strategies discussed here are as follows:
STRATEGIC PLANNING STRATEGIES OF QUALITY EXPANDING TARGET MARKET STRATEGIES OF GETTING GOALS I.E. "HIGH PROFITS" MARKETING STRATEGY PRICE STRATEGY PROMOTION STRATEGIES DISTRIBUTION CHANNELS FACILITATING THE PRODUCT BY INFRASTRUCTURE ADVERTISEMENT SALES PROMOTION ACTIVITIES
The details are as follows:
STRATEGIC PLANNING
In last years, the company had a great success, as the strategy worked which resulted in making Coca Cola Company the world's leading company. Company accomplished the crust of it's strategy as
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Worldwide volume increased by 4 percent with strong international growth of 5 percent. Earnings per share grew by 82 percent. Return on common equity grew from 23 percent to 38 percent this year. Return on capital increased from 16 percent in 2000 to 27 percent. The company has generated free cash flow of $3.1 billion, up from $2.8 billionThe marketing strategy for the future is as follows: Accelerate carbonated soft-drink growth, led by Coca-Cola. Selectively broaden the family of beverage brands to drive profitable growth. Grow system profitability and capability together with our bottling partners. Serve customers with creativity and consistency to generate growth across all channels. Direct investments to highest potential areas across markets. Drive efficiency and cost-effectiveness everywhere.
STRATEGIES OF QUALITY
After Micro and macro analysis Brand "coke" is primarily role1. Enhance competition moments2. When people watch cricket3. Through commercialization4. Fun time
EXPANDING TARGET MARKET
In last 2 years Coke has come back in aggressive manner. Consumer has choice Attractive brand name Brand differentiating
Consumer Has Got Choice:
Now the consumer has got choice. Because now they know the name of another big brand, though coke is the 2nd best name but it can get a better position after some time.
Attractive Brand Name:
Now the consumers know the Name of Coke, because Coke is the name, which is the most popular after the word "ok". So people can better differentiate brands with each other.Brand Differentiation:
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Now different companies have got different brand names. So, people can distinguish between brands. Two major brands "coke" and "Pepsi" also have brand names.
STRATEGIES OF GETTING GOALSi.e. "HIGH PROFITS"
To increase the price is the least thing, which Coke can adopt. There are so many ways through which Coke can increase the profits. Some major ways are as follows. Volume can be increased Interest level of consumers To take part in energetic festivals
MARKETING STRATEGY
What people want in a beverage is a reflection of who they are, where they live, how they work and play, and how they relax and recharge. Whether you're a student in the United States enjoying a refreshing Coca-Cola, a woman in Italy taking a tea break, a child in Peru asking for a juice drink, or a couple in Pakistan buying bottled water after a run together, we're there for you. We are determined not only to make great drinks, but also to contribute to communities around the world through our commitments to education, health, wellness, and diversity. Coke strives to be a good neighbor, consistently shaping our business decisions to improve the quality of life in the communities in which we do business.
PRICE STRATEGY
Trade Promotion:
Coca cola company gives incentives to middle men or retailers in way a that they offer them free samples and free empty bottles, by this these retailers and middle man push their product in the market following Seen as sold"
Different Price in Different Seasons:
Some times Coca Cola Company change their product prices according to the season. Summer is supposed to be a good season for beverage industry in Pakistan.So in winter they reduce their prices to maintain their sales and profit.
PROMOTION STRATEGIES
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Getting shelves:They gets or purchase shelves in big departmental stores and display their products in that shelves in attractive style.Eye Catching PositionSalesman of the coca cola company positions their freezers and their products in eye-catching positions. Normally they keep their freezers near the entrance of the stores.Sale PromotionCompany also do sponsorships with different college and school's cafes and sponsors their sports events and other extra curriculum activities for getting market share.
DISTRIBUTION CHANNELS
Coca Cola Company makes two types of sellingDirect sellingIndirect sellingDirect SellingIn direct selling they supply their products in shops by using their own transports. They have almost 450 vehicles to supply their bottles. In this type of selling company have more profit margin.Indirect SellingThey have their whole sellers and agencies to cover all area. Because it is very difficult for them to cover all area of Pakistan by their own so they have so many whole sellers and agencies to assure their customers for availability of coca cola products.
FACILITATING THE PRODUCT BY INFRASTRUCTURE
For providing their product in good manner company has provided infrastructure these includes: Vizi cooler Freezers
Display racks Free empty bottles and shells for bottles
ADVERTISEMENT
Coca Cola Company use different mediums Print media Pos material TV commercial Billboards and holdings
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HOW COKE DETERMINE THE YEARLY BUDGET
Coke determines its yearly budget by the Sales volume Profitability Target volume
Sales Volume:
Coke determines its yearly budget through the sales volume. They first concentrate on the thing is "what is the condition of their sales?" if the condition is good of their sales then they definitely increase their production and sales volume.
Profitability:
The second thing through which they determines budget is the "profit" .if they r getting profits with the high margin, then they definitely want to increase their profits in the next coming year. To get profit is the first priority of the Coke.
Target Volume:
To run the business every industry increases volume in specific time period. If industry achieves those goals in that period then for the coming year it increases the volume of the target.Coke did the same.
SALES PROMOTION ACTIVITIES
Coca-Cola CricketCoca-Cola ConcertsCoca-Cola Food MelaCoca-Cola Party in a ParkCoca-Cola Pet PromotionCoca-Cola Ramzan Campaign
Ethical issues concerning Coca-Cola in India
Situation Analysis:
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In 2003, the community near the Coca-Cola bottling plant in Kerala, India protested against the
water scarcity and polluted water that resulted from its bottling operations. The allegations
caused the closure of the bottling plant. Coca-Cola was banned in the state for these unethical
business practices. Soon after the incident, the Center for Science and Environment (CSE), a
Delhi-based environmental NGO, released a report indicating the presence of pesticides, greatly
exceeding European standards, in a dozen popular beverages sold under the brand names of the
Coca-Cola Company and PepsiCo. This report raised serious protests all over India on the soft
drink industries, especially Coca-Cola and PepsiCo. Together, the companies have 90% of the
India's soft drink market.
In response to the allegations, Coca-Cola denies them by saying their products are safe and
questions the lab reports presented by CSE. The University of Michigan placed the Coca-Cola
Company on probation in 2006, and asked for an independent assessment of its operations in
India. The soft drinks were examined by an independent lab, The Energy and Resources Institute
(TERI). According to the reports the soft drinks were declared safe and pesticide free. However,
the CSE claimed that only the water was tested and not the other ingredients; ingredients such as
artificial flavors and sugar. After the reports from TERI were published the government declared
soft drinks as safe. However, the problems with some bottling plants still remain, due to the
depleting levels of ground water, day by day.
Critical Issues/Problems:
Solid waste and water issue: The communities near the bottling plant in India complained about
the passage of sludge as fertilizer, causing health and environmental damage. The most
important issue concerning these communities is the depletion of water levels caused by the
Coca-Cola bottling operations which have drastically reduced availability of water for irrigation
purposes.
Pesticides in soft drinks: The other issue concerning human health caused by Coca-Cola is that
their bottled water and soft drinks contain pesticides which were tested by the reputed NGO,
CSE.
Dual product standards: Coca-Cola is accused of having dual standards in terms of their
products and safety measures concerning human health with respect to USA, Europe and India.
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Community issue: These allegations affected Coca-Cola largely with its sales and also caused the
closure of one of their bottling plants in Kerala, India. Additionally, Coca-Colas products are
banned in the state of Kerala, India.
Action Taken:
Coca-Cola Company, India thought seriously about its corporate responsibility and witnessing
huge sales losses. In order to gain trust among the local communities near the bottling plant, they
improved their business practices and reduced the water usage by 34%. Through the practice of
rainwater harvesting, Coca-Cola returned substantial water to the aquifers. They have stopped
distributing sludge as Biosolids(fertilizers) to farmers for agriculture use, and have taken
initiatives with the Indian government to encourage the development of additional solid waste
disposal sites. The water used for making soft drinks is treated with activated carbon filtration
and run through a purification process to ensure that the water is free of pesticide residue. The
ingredients are also closely monitored and undergo various quality checks. According to the
companys factsheet, they strictly follow the product standards which are the same all over the
world.
Coca-Cola has also partnered with the NGOs and the government to provide medical access to
poor people through regular health camps. In addition to their outreach efforts, the company
committed itself to environment responsibility through its business operations. For example by
following the practices of conserving energy and by adhering to the ban on purchasing CFCs,
Coca-Cola exhibited greater corporate responsibility.
The allegations in other ways helped Coca-Cola Company, India to show their corporate social
responsibility and to maintain good product quality standards. The initiatives all over India
helped them reach villages for a good cause and also indirectly marketed their products with
establishing a trust among the public. After all these allegations, the CSE is still not convinced of
the quality of the product. Therefore, Coca-Cola must prove that they have upgraded their lab
with sophisticated instrument which is capable of measuring pesticide residue in soft drinks. As
per the recent reports by CSE, they claim that the pesticide residue has gone up 27 times higher
than expected level by the Bureau of Indian Standards (BIS) (in 2006).
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References
www.coca-colaindia.com www.worldbook.com Text Book of Management of a sales Force. Marketing By Philip Kotler. Some employees of Hindustan Coca Cola Ltd., working at Bangluru.
