MP BIRLA INSTITUTE OF MANAGEMENT 1 PROJECT REPORT ON “Consumption of AQUAFINA bottled water in TOURS & TRAVEL INDUSTRY,Bangalore” AT PepsiCo India pvt LTD Submitted in partial fulfillment of the requirements of the M.B.A Degree Course of Bangalore University By Achint kumar. Regd. no. 05XQCM6006 Under the guidance and supervision of Mr. RAMESH BABU Professor SUMITRA SREENATH Assistant Marketing head MPBIM PepsiCo India Pvt LTD (Internal Guide)
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Pepsi Aquafina Bottle Water in Tours & Travel Industry
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MP BIRLA INSTITUTE OF MANAGEMENT 1
PROJECT REPORT
ON
“Consumption of AQUAFINA bottled water in TOURS & TRAVEL INDUSTRY,Bangalore”
ATPepsiCo India pvt LTD
Submitted in partial fulfillment of the requirements of theM.B.A Degree Course of Bangalore University
ByAchint kumar. Regd. no.
05XQCM6006
Under the guidance and supervision of
Mr. RAMESH BABU Professor SUMITRA SREENATH Assistant Marketing head MPBIM
PepsiCo India Pvt LTD (Internal Guide)
M.P BIRLA INSTITUTE OF MANAGEMENT Associate Bharatiya Vidya Bhavan
# 43, Race Course Road, Bangalore-560001
2005-2007
MP BIRLA INSTITUTE OF MANAGEMENT 2
DECLARATION
I, Mr.Achint Kumar (Reg.No.05XQCM6006),a student of Master of Business Administration of MP BIRLA INSTITUTE OF
MANAGEMENT declares that the Project Report on PepsiCo India Pvt Ltd is my original work. It has not been copied or transcribed
from anywhere. It is based on field study and my own observations.
Date: 12-05-2007 ACHINT KUMAR
MP BIRLA INSTITUTE OF MANAGEMENT 3
GUIDE CERTIFICATE
This is to certify that the Research work on “CONSUMPTION OF AQUAFINA BOTTELED WATER IN TOURS & TRAVEL
INDUSTRY,Bangalore”has been prepared by Mr.ACHINT KUMAR bearing registration number 05XQCM6006,under my guidence .This
has not formed a basis for the award of any Degree/Deploma by Bangalore University or any other university.
“What is ‘Today’ becomes ‘Yesterday’ and what is ‘Tomorrow’ becomes‘Today’. Give your best today, be it in your tiniest of duty
Performance, in practicing values and ethics, in fulfilling all small or
Big commitments. The best will come to you tomorrow”.
At The Rise Of All I Would Like To Thank The Almighty, For GivingMe Strength And Perseverance To Do This Project.
I would like to convey my sincere gratitude to Mr. Ramesh Babu(AssistantManager. India Sales) who permitted me to carry on my project work in their organization.
I Express My Deep Sense of Gratitude for his Continuous Help & kind guidance, also gave me lots of useful information during my project work.
I am also grateful to all other staff of thePepsico India Pvt LTD,Bangalore, who have spent their precious time to interact with me.
My heartfelt thanks to my respected pricipal Dr.Malavalli & I Extend A Special Gratitude To My Internal Guide Prof.Sumitra Sreenath, Professor, M.P.Birla Institute of Management Studies for his excellent co-operation and guidance throughout my project.
I Thank My Parents, Who are The Backbone Behind My Deeds.
I Would Like To Place My Deep Sense Of Indebtedness to AllRespondents and My Friends and All Other Who Have Extended Their Help directly orindirectly in making the project report effective and informative.
ACHINT KUMAR
MP BIRLA INSTITUTE OF MANAGEMENT 6
CONTENTS
1 EXECUTIVE SUMMERY 7
2 INTRODUCTION 8
• INDUSTRY PROFILE
• COMPANY PROFILE
• CHANNELS OF OIPERATION
3. OBJECTIVE OF STUDY 17
4. AREA OF STUDY 18
5. RESEARCH METHODOLOGY 21
• TYPES OF RESEARCH
• SAMPLE SIZE
• SAMPLING TECHNIQUE
6. DISTRIBUTION CHANNELS 27
7. PROJECT REPORT 32
8. SUGGESTIONS 39
9 CONCLUSION 40
10 BIBLIOGRAPHY 41
MP BIRLA INSTITUTE OF MANAGEMENT 7
EXECUTIVE SUMMARY
This project is a study of Pepsi’s Distribution programme (PDP) of AQUAFINA
BOTTELED WATER IN TOURS & TRAVEL INDUSTRY,BANGALORE
Other than general overview of the current distribution network, the project aims to
look into the details of how potential is there in this tours & travel industry.As pepsi
wants to start its AQUAFINA botteled water in the Luxary and semi luxary buses
whose cost will be included in the ticket itself which will increase the Company’s profit
or earnings, thereby increasing the productivity and efficiency.
Based on the findings of a five-week study, this report identifies certain loopholes in the
distributors policy as well as in company policy.
Finally, the report provides possible solution to the above problems in the form of
recommendation as well as certain suggestion for more optimal use of distributors.
INTRODUCTION
MP BIRLA INSTITUTE OF MANAGEMENT 8
MP BIRLA INSTITUTE OF MANAGEMENT 9
INDUSTRY PROFILE
The Soda Beverage Industry or the Soda Industry is comprised of many different
companies and drinks. Within the Soda Industry is a more specialized market that
caters to Cola drinkers.
The Cola Industry has gone through many changes and each cola product has its
origins. I will begin by first by defining Cola. I will then describe each cola market, and
discuss the Cola Industry history. I will also discuss issues affecting the Cola Industry’s
market, particularly the demand and supply curve. Finally, I will describe the Cola
Industry market structure.
The Coca-Cola Company operates in more than 200 countries, and on a global basis, we
have the most inclusive workforce in the world. Our greatest opportunity is to maximize
this asset
With the wide consumption of soft drinks, the industry offers an enormous yet untapped potential with its low per capita consumption and the large young population.
Today, the country has one of the lowest rates of consumption of Cola company products (only 13 8oz-servings per person per year), compared to Malaysia (33), Philippines (122) and Singapore (141).
Because soft drinks sales are sensitive to price, every effort has been made to maintain affordability. In 1997 you could buy 11 small bottles of carbonated soft drinks or ready-to-drink tea with the daily minimum
MP BIRLA INSTITUTE OF MANAGEMENT 10
wagin Jakarta and 13 in 2001. However, you could buy 205 candies with the same minimum wage in 1997 and only 136 in 2001.
In terms of job creation opportunity, the soft drink industry has a high employment multiplier. At 4.025 times, it ranks 14th against the other 66 industry sectors in the country. This means that for every one job created, or lost, in the soft drink industry then four will be created, or lost, at the national level.
For every one job created in the soft drink industry, four will be created at the national level
Eighty percent of soft drink sales are made through retailers and wholesalers, of which 90% are considered small-scale businesses. For these small-scale businesses, soft drink products are their most important merchandise - contributing 35% of total sales and generating 34% of profit.
Other supporting industries affected by the activity in the soft drink industry include glass, bottle closures, transport and media.
80% of soft drink sales are made through retailers and wholesalers
In 1999, 85% of monthly soft drink consumers had an average household income of less than Rp 1 million (US$ 100) per month. Of these 46% was less than Rp 500,00 (US$ 50)
Seventy-two percent of weekly consumers had an average household income of less than Rp. 1 million per month. Of these over 40% are either students, partially employed people or pensioners.
Amongst weekly consumers, soft drinks are consumed as often as syrup and snack
MP BIRLA INSTITUTE OF MANAGEMENT 11
COMPANY PROFILE
PepsiCo's beverage business was founded in 1898 by Caleb Bradham, a New Bern, North
Carolina druggist, who first formulated Pepsi-Cola. Today, PepsiCo is among the largest
consumer products companies in the world, with revenues of over $28 billion and
over
150,000 employees. The PepsiCo principal businesses include Frito-Lay snacks, Pepsi-
Cola beverages; Gatorade sports drinks, Tropicana juices and Quaker Foods. PepsiCo
brands are available in nearly 200 countries and territories and generate sales at the
retail level of about $78 billion. PepsiCo offers product choices to meet a broad
variety of needs and preference - from fun-for-you items to product choices that
contribute to healthier lifestyles. PepsiCo's mission is "To be the world's premier
consumer Products Company focused on convenient foods and beverages.
PepsiCo India
Pepsi is one of the most well known brands in the world today available in over 200
countries. The company has the largest and fastest growing businesses in India and
China, which include more than a third of the world's population. This reflects that
India holds a central position in Pepsi's corporate strategy. India is a key market for
PepsiCo, and at the same time the company has added value to Indian agriculture and
industry. PepsiCo entered India in 1989 and is concentrating in three focus areas
. Soft drink concentrate
. Snack foods and vegetable Food processing
The company entered the Indian market through a joint venture with Voltas and
Punjab Agro Industries. With the introduction of the liberalisation policies since 1991,
Pepsi took complete control of its operations. One of PepsiCo's key strategies was to
develop a
MP BIRLA INSTITUTE OF MANAGEMENT 12
completely local management team.6 Pepsi has 19 company owned factories while their
Indian bottling partners own 21
Marketing Strategies
India forms a key market in PepsiCo's global strategy. However, despite a huge market
of a billion people, the soft drink industry, with a per capita consumption of two bottles,
was vastly underdeveloped.
Pepsi's marketing problem went beyond the normal 4Ps of operating effectively in a
market. To enter India, Pepsi faced a 6P marketing problem, with Politics and Public
opinion constituting the 2 additional Ps. Pepsi played the 6Ps very effectively. It
delivered an export/import surplus to the then foreign exchange starved government by
offering to develop agricultural exports from Punjab. In this way, it was able to offset
the cost of importing concentrate into the country. Parallely, with its trend-setting
advertising, innovative on-ground marketing and intrusive distribution system, Pepsi,
today, has brought to its fold a staggering 200 million consumers. Brand Pepsi is the
largest single soft drink brand in India. Pepsi is recognised as 'The' iconic youth brand
in this part of the world. After flooding cities and large towns, Pepsi is now penetrating
the rural market.
Pepsi launched in India as Lehar Pepsi - 'The choice of a new generation'. In the year
1993, Coca-Cola was planning a re-entry into India. Having been for years the cola
that Indians grew up drinking, the threat of such familiarity, albeit somewhat dated,
had to be countered. The task was, therefore, to reiterate faith and retain loyal
consumers. To ride on the passion generated by its very Successful launch, Pepsi
MP BIRLA INSTITUTE OF MANAGEMENT 13
followed with its first Hinglish 'Yehi hai right choice baby. Aha!' commercial.
The Cola Wars had come to India.
'Aha!' created a new idiom. Pepsi further built empathy and stature by signing
on a host of youth icons of the time. It is, however, Shah Rukh Khan, arguably
one of India's biggest cine stars, who continues to e n d o r s e P e p s i t o d a t
e a n d e p i t o m i s e s t h e b r a n d ' s c o n n e c t w i t h movies, music and
Bollywood.
The 50th year of Indian independence was an opportune period for Pepsi to
celebrate the spirit of youth. 'Freedom to be' was Pepsi's salute.
1998 was the year of the 'GenerationNext'. With its finger constantly on the
pulse of the nation, Pepsi revisited its raison d'etre - the cons um e r . T
h e bra nd wa s given a ne w visio n - in t une wi th the consum er
experiences and their attitude to li fe - ' Ye n dil maange more' was the new
brand expression.
The Product Pepsi and its other Brands
The Cola franchise also includes Diet Pepsi, the first diet cola to be launched in
India. Catering to emerging needs of the calorie and figure conscious, Diet Pepsi
is the image variant in the portfolio.
Cola is not the only product PepsiCo brought to India. The PepsiCo brand
stable includes Mountain Dew, Mirinda, 7UP, Slice, Aquafina and Tropicana
forming a part of the wide spectrum of beverages offered. M ou nt ain D e
w, i ntroduced i n 2003 has succeeded i n crea tin g an entirely new category.
Pepsi's launch of America's number one selling bottled water, Aquafina, fuelled
the dull and boring Indian packaged w a t e r i n d u s t r y w i t h a d i s t i
n c t i v e b r a n d posi tion that reflected consumer lifestyle and status.
MP BIRLA INSTITUTE OF MANAGEMENT 14
Promotion
The bottled soft drink category needs to be driven with continuous excitement.
Early on, Pepsi India identified three broad platforms: cricket, movies and
music to give expression to its core value of excitement.
While cricket had always been the most popular sport in India, with new
technology coming into cricket from coverage to sports gear to day/night
versions of the game, it was set to acquire the status of a religion in the sub-
continent. Pepsi picked up the opportunity early on b y n o t o n l y c o n t r a c
t i n g th e r i gh ts to a l l Te sts an d One D a y Internationals (ODIs)
played in I n d i a , b u t a l s o s i g n i n g u p t o p performers early such as
Sachin Tendulkar and Rahul Dravid and c r e a t i n g s o m e v e r y c u t t i n
g e d g e a n d m e m o r a b l e a d v e r t i s i n g campaigns with them.
MP BIRLA INSTITUTE OF MANAGEMENT 15
Channels of Operations (Distribution Network)
The entire country is divided into four zones in marketing of bottled soft
drinks (BSD). These are namely:
. North Market Unit (NOMU)
. South Market Unit (SOMU)
. Central Market Unit (CEMU)
. Western Market Unit (WEMU)
PepsiCo. Ltd. operates through two channels in the beverages sector namely
Franchise Owned Bottling Operations (FOBO)
Company Owned Bottling Operations (COBO)
FOBO Distribution
In case of FOBO distribution the production and distribution process in handled by the
franchisee and the company appoints a franchise manager to look into the FOBO
operations. The FOBO structure is as follows:
ƒ Pepsi Foods Ltd.
ƒ Syrup Providing '
ƒ Franchise Bottlers
ƒ Franchise's investment in plant, machinery and glass Trucks for distribution
ƒ PepsiCo India Marketing Company (Sales and Marketing) The various
regions covered by the FOBO channel in India are as follows:
MP BIRLA INSTITUTE OF MANAGEMENT 16
o Jammu and Kashmir
o Delhi and National Capital Regions
o Western Uttar Pradesh
o Rajasthan
o Goa
o Madhya Pradesh.
o Orissa.
o Andhra Pradesh.
o North Eastern States.
o Bihar.
o Jharkhand
COBO Distribution
The COBO distribution channel is further classified as
DIRECT through Carrying and Forwarding (C& F) Agents INDIRECT
through Distributors
The regions of India which are served by the COBO distribution channel
are:
¾ Eastern Uttar Pradesh.
¾ Punjab
¾ Haryana
¾ Himachal Pradesh.
¾ Gujarat.
¾ Maharashtra.
¾ Karnataka.
¾ Kerela.
¾ West Bengal.
¾ Tamil Nadu
MP BIRLA INSTITUTE OF MANAGEMENT 17
OBJECTIVE OF RESEARCH
From the analysis of the data collected, practical visit to the retail outlet and from the experience of being a part of a great organisation we reached the following conclusion:
• Aquafina is most popular bottled water amongst its user mainly because of its brand name .Thus it should focus on keeping the cost low so that it can capture the major part of the market.
• Being a popular product it was invisible in the Travel industry.
• Product is very popular in the corporate offices, but due to its high cost it was not so effective in that Industry.
• Local products were much popular in that Industry due to low cost.
• In Today’s circumstances, customer is a king because he has got various choices around him. If you are not capable of providing him the desired result he will not be able to buy your product.
MP BIRLA INSTITUTE OF MANAGEMENT 18
NEED AND IMPORTANCE OF STUDY
Both Coke and Pepsi are trying to gain market share in the Indian beverage market,
which is valued at over $30 billion a year. Each company is coming up with new
products and ideas in order to increase their market share. The creativity and
effectiveness of each company's marketing strategy will ultimately determine the
winner with respect to sales, profits, and customer loyalty. Not only are these two
companies constructing new ways to sell Coke and Pepsi, but they are also thinking of
ways in which to increase market share in other beverage categories. Although the
goals of both companies are exactly the same, the two companies rely on somewhat
different marketing strategies.
Pepsi has always taken the lead in developing new products, but Coke soon learned their
lesson and started to do the same. Both companies have relied on finding new markets,
especially in the rural areas of India. These companies, in trying to capture market
share have relied on the development of new products. In some cases the products
have been successful. However, at other times the new products have failed. One solution
to increasing market share is to carefully follow consumer wants in each country. The
next step is to take fast action to develop a product that meets the requirements for that
particular region. Both companies cannot just sell one product; if they do they will not
succeed. They have to always be creating and updating their marketing plans and
products. The companies must be willing to accommodate their "target markets".
Gaining market share occurs when a company stays one step ahead of the competition
by knowing what the consumer wants.
MP BIRLA INSTITUTE OF MANAGEMENT 19
Below is a comparative scenario in terms of the brands available in both the
companies:
PepsiCo India Coca Cola India
Pepsi Thums-Up, Coca-Cola
Mirinda Orange Fanta
Mirinda Lemon Limca
7 Up, Mountain Dew Sprite
Slice Maaza
Aquafina Kinley
Lehar Soda Kinley Soda
Table 3.2 Competing products of Pepsi and Coke
In case of rural areas of Karnataka, the local players also pose a threat to the
beverage industry. During the peak months of April to June, companies like
Bowler, Cyber are also a favorite among the locals. This is mainly because of the
fact that the rural people do not differentiate between the brands but only want a
"black colored" soft drink. However, the threat of local brands to Pepsi is not
major as compared to the threat posed by Coke.
MP BIRLA INSTITUTE OF MANAGEMENT 20
AREA OF STUDY
AND
METHODOLOGY
MP BIRLA INSTITUTE OF MANAGEMENT 21
Area of Study
The study was conducted for the tours & Travel industry,Bangalore.The various
private travel company’s who run there buses from Bangalore to othere cities and
States like TAMILNADU,KARALA,GOA ,MAHARASHTRA and various small & big
Districts of Karnataka.
MP BIRLA INSTITUTE OF MANAGEMENT 22
The market of India is increasingly being recognized as the richest potential market by
MNC’s and other companies looking to expand their operations. In the KA-COBO area
alone there are 71 districts.
MethodologyIn order to understand the distribution system used by Pepsi, the initial phase of the
project involved three weeks of field work in city,
Following the field visit, the summarizing of all the data collected on Microsoft Excel
was observed. During this phase, some inconsistencies in the data were found and
further visit to the places were undertaken to verify the data.
During the field work and office work, interviews and informal discussion with the
travel agents people Staff members (TDM, ADC, SAM, PAM, CE, ME), distributors
were conducted in order to learn more about the distributors and their network and
understand problem from different prospective.
Finally, an attempt was made to combine the learning in both phases by actually
summarizing all the information collected (volumes, manpower, vehicle used, area
occupied, outlets etc) and then drawing conclusion to identify the problems and
loopholes in the process of distribution. This detailed study and analysis of data was
conducted for certain distributors in all the six territories.
MP BIRLA INSTITUTE OF MANAGEMENT 23
TYPES OF RESEARCH
The Research was made on the bases of:
• Primary data
• Secondary data
Primary data:
The primary data is collected through:
1. Personal observation.
2. Interview with:
o Owners of Agency
o Agents
o Bus Drivers & customers
o Managers and Executives of various Department PepsiCo Ltd.
These are the major five Travel agencies which we have come across.• KPN Travels• SRS Traves• Neeta Travels• National NDR• Kallada TravelsKpn is having the most no of Buses and they have the most no of destinations acrossKarnataka,The next is SRS Travels & National NDR
NAME AC
KPN TRAVELS NA
KALADA TRAVELS NA
SRS TRAVELS 20
NATIONAL NDR NA
NEETA TRAVELS NA
AC BUSES
1.510.50
NEETA TRAVELS
Series1
NA
We came to the reference that only SRS Travels is having AC buses and no other company was having the AC buses which run through various cities.
NAME NON AC
KPN TRAVELS 40
KALADA TRAVELS 18
SRS TRAVELS 20
NATIONAL NDR 40
NEETA TRAVELS 12
NON AC
4540353025201510
50
NAME NON AC
Series1
Series2
Series3
Series4
Series5
Series6
Series7
We came to the reference that KPN & NATIONAL NDR is having the most number of non Ac buses as they are having the most urban routes due to which they are having most no of Non Ac buses.
NAME VOLVO
KPN TRAVELS 30
KALADA TRAVELS 19
SRS TRAVELS NA
NATIONAL NDR 10
NEETA TRAVELS 30
V OLV O
35
30
25
20
15
10
5
0
SRS
TRA
VELS
Ser i es1
Ser i es2
Ser i es3
Ser i es4
Ser i es5
NA
KA LA DA TRA VELS 19
KPN TRA VELS 30
NAME VOLVO
As being the Market leader Neeta travels And KPN Travels is having the most no ofVolvo buses buses because thre buses mostly go to areas of Bombay And Pune.
NAME DESTINATIONSKPN TRAVELS CHENNAI, KALIKUT, COIMBATORE, ERNAKULAM, HYDERABEAD, MADURAI, PONDICHERRY, SALEM, BO
With this we came to the infrence that KPN and Kallada Travels can be called as the king of the market as they are having the most no of buses for the different routes.
SUGGESTIONS
MP BIRLA INSTITUTE OF MANAGEMENT 62
SUGGESTIONS
AQUAFINA is in the growth stage of product life cycle (PLC).There is a lot of demand for the quality product in the Market. Suggestion that should be taken into consideration are:
• The company should make hindrance free agreements for travel owners of travel agencies to give there suggestion about the product.
• Company should pay special attention on the cos of the product as the customer & Travel owners need low cost and quality product.
• Company should come with various schemes by which they can attract the customers of ther target Market.
Company should always be aware of the competitors schemes.
MP BIRLA INSTITUTE OF MANAGEMENT 63
CONCLUSION
MP BIRLA INSTITUTE OF MANAGEMENT 64
MP BIRLA INSTITUTE OF MANAGEMENT 65
CONCLUSION
From the analysis of the data collected, practical visit to the retail outlet and from the experience of being a part of a great organisation we reached the following conclusion
• It was a vast untapped Market .Only 7% of the market is tapped and that is by the local competitors only.
• But as of now people have become more health conscious.Thay want healthy products due to which there is a great chance for Pespsi to gain that Market.
• As Tourism sector is growing very rapidly so due to that there is a good chance for Papsi to grow its Market in this Tours & Travel Industry.
• As this sector is growing very fast due to much of entry of Foreign Tourist so due to which there is a good opportunity for the company to grab that market.