Report On Distribution Effectiveness Of Cola, India

Preface This project, “studying outlet mapping of a major soft drink company” in Nasik, Paanchvati region was undertaken for duration of two months as a part of learning process during the summer training at Hindustan Coca Cola Beverages Pvt. Ltd. Mumbai The main objective of this study lies in understanding the organization, studying, understanding the marketing channels of the company and to correct its distribution activities as well. Deep learning regarding channel efficiency and understanding the market structure, identifying potential outlets and practical survey with Mr. Gajendra (Market Developer) was also undertaken. This project is regarding the distribution effectiveness, to study the impact of it on sales and how the company understands the market using different strategies. The project was undertaken for a period of sixty days and was carried out within the limits of Panchvati, Nasik. During the entire course of the project, a total of 130 outlets were surveyed for analysis regarding distribution effectiveness & channel mapping. In the first part of the project, a survey of selected outlets was conducted by taking interview of outlet owners or managers. Based on the information gathered through the outlet managers or owners service and distribution improvement, competitive position in the different areas and scope for the market expansion is studied. It was an excellent experience while working with Hindustan Coca Cola Beverages Pvt. Ltd. I learnt about the environment and culture of the organization, its distribution structure; which I feel will help me in my future endeavors in life. This report consists of five chapters. The first chapter deals with “Introduction of project, Essentials of Project study”. The second chapter deals with Project objectives, Research Methodology, and Project scope & limitations to the research or data which is collected at that time. The third chapter deals with Company Profile and Product Profile. The fourth chapter deals with Findings, Analysis and Interpretation of data collected from various outlets. The fifth chapter deals with Conclusion of project & with Recommendations and Annexure having Questionnaire, and Bibliography etc.

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CHAPTER 1:

INTRODUCTION

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Coca-Cola, the product that has given the world its best-known taste was born in Atlanta, Georgia, on May 8, 1886. Coca-Cola Company is the world’s leading manufacturer, marketer and distributor of non-alcoholic beverage concentrates and syrups, used to produce nearly 400 beverage brands. It sells beverage concentrates and syrups to bottling and canning operators, distributors, fountain retailers and fountain wholesalers. The Company’s beverage products comprises of bottled and canned soft drinks as well as concentrates, syrups and notready-to-drink powder products. In addition to this, it also produces and markets sports drinks, tea and coffee. The Coca- Cola Company began building its global network in the 1920s. Now operating in more than 200 countries and producing nearly 400 brands, the Coca-Cola system has successfully applied a simple formula on a global scale: “Provide a moment of refreshment for a small amount of money- a billion times a day.” The Coca-Cola Company and its network of bottlers comprise the most sophisticated and pervasive production and distribution system in the world. More than anything, that system is dedicated to people working long and hard to sell the products manufactured by the Company. This unique worldwide system has made The Coca-Cola Company the world’s premier soft-drink enterprise. From Boston to Beijing, from Montreal to Moscow, Coca-Cola, more than any other consumer product, has brought pleasure to thirsty consumers around the globe. For more than 115 years, Coca-Cola has created a special moment of pleasure for hundreds of millions of people every day.

The Company aims at increasing shareowner value over time. It accomplishes this by working with its business partners to deliver satisfaction and value to consumers through a worldwide system of superior brands and services, thus increasing brand equity on a global basis. They aim at managing their business well with people who are strongly committed to the Company values and culture and providing an appropriately controlled environment, to meet business goals and objectives.

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1.1: A BRIEF INSIGHT- THE FMCG INDUSTRY IN INDIA

Fast Moving Consumer Goods (FMCG) are products that have a quick turnover and relatively low cost. Consumers generally put less thought into the purchase of FMCG than they do for other products. The Indian FMCG industry witnessed significant changes through the 1990s. Many players had been facing severe problems on account of increased competition from small and regional players and from slow growth across its various product categories. As a result, most of the companies were forced to revamp their product, marketing, distribution and customer service strategies to strengthen their position in the market. By the turn of the 20th century, the face of the Indian FMCG industry had changed significantly. With the liberalization and growth of the Indian economy, the Indian customer witnessed an increasing exposure to new domestic and foreign products through different media, such as television and the Internet. Apart from this, social changes such as increase in the number of nuclear families and the growing number of working couples resulting in increased spending power also contributed to the increase in the Indian consumers' personal consumption. The realization of the customer's growing awareness and the need to meet changing requirements and preferences on account of changing lifestyles required the FMCG producing companies to formulate customer-centric strategies. These changes had a positive impact, leading to the rapid growth in the FMCG industry. Increased availability of retail space, rapid urbanization, and qualified manpower also boosted the growth of the organized retailing sector. HLL led the way in revolutionizing the product, market, distribution and service formats of the FMCG industry by focusing on rural markets, direct distribution, creating new product, distribution and service formats. The FMCG sector also received a boost by government led initiatives in the 2003 budget such as the setting up of excise free zones in various parts of the country that witnessed firms moving away from outsourcing to manufacturing by investing in the zones. Though the absolute profit made on FMCG products is relatively small, they generally sell in large numbers and so the cumulative profit on such products can be large. Unlike some industries, such as automobiles, computers, and airlines, FMCG does not suffer from mass layoffs every time the economy starts to dip. A person may put off buying a car but he will not put off having his dinner. Unlike other economy sectors, FMCG share float in a steady manner irrespective of global market dip, because they generally satisfy rather fundamental, as opposed to luxurious needs. The FMCG sector, which is growing at the rate of 9% is the fourth largest sector in the Indian Economy and is worth Rs.93000 crores. The main contributor, making up 32% of the sector, is the South 4

Indian region. It is predicted that in the year 2010, the FMCG sector will be worth Rs.143000 crores. The sector being one of the biggest sectors of the Indian Economy provides up to 4 million jobs. (Source: HCCBPL, Monthly Circular, March)

The FMCG sector consists of the following categories: 

Personal Care- Oral care, Hair care, Wash (Soaps), Cosmetics and Toiletries, Deodorants and Perfumes, Paper products (Tissues, Diapers, Sanitary products) and Shoe care; the major players being; Hindustan Lever Limited, Godrej Soaps, Colgate, Marico, Dabur and Procter & Gamble.



Household Care- Fabric wash (Laundry soaps and synthetic detergents), Household cleaners (Dish/Utensil/Floor/Toilet cleaners), Air fresheners, Insecticides and Mosquito repellents, Metal polish and Furniture polish; the major players being; Hindustan Lever Limited, Nirma and Ricket Colman.



Branded and Packaged foods and beverages- Health beverages, Soft drinks, Staples/Cereals, Bakery products (Biscuits, Breads, Cakes), Snack foods, Chocolates, Ice-creams, Tea, Coffee, Processed fruits, Processed vegetables, Processed meat, Branded flour, Bottled water, Branded rice, Branded sugar, Juices; the major players being; Hindustan Lever Limited, Nestle, Coca-Cola, Cadbury, Pepsi and Dabur



Spirits and Tobacco; the major players being; ITC, Godfrey, Philips and UB

1.2: BEVERAGE INDUSTRY IN INDIA: A BRIEF INSIGHT In India, beverages form an important part of the lives of people. It is an industry, in which the players constantly innovate, in order to come up with better products to gain more consumers and satisfy the existing consumers. The beverage industry is vast and there various ways of segmenting it, so as to cater the right product to the right person. The different ways of segmenting it are as follows: 

Alcoholic, non-alcoholic and sports beverages



Natural and Synthetic beverages



In-home consumption and out of home on premises consumption.



Age wise segmentation i.e. beverages for kids, for adults and for senior citizens



Segmentation based on the amount of consumption i.e. high levels of consumption and low levels of consumption.

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If the behavioural patterns of consumers in India are closely noticed, it could be observed that consumers perceive beverages in two different ways i.e. beverages are a luxury and that beverages have to be consumed occasionally. These two perceptions are the biggest challenges faced by the beverage industry. In order to leverage the beverage industry, it is important to address this issue so as to encourage regular consumption as well as and to make the industry more affordable. Four strong strategic elements to increase consumption of the products of the beverage industry in India are: 

The quality and the consistency of beverages needs to be enhanced so that consumers are satisfied and they enjoy consuming beverages.



The credibility and trust needs to be built so that there is a very strong and safe feeling that the consumers have while consuming the beverages.



Consumer education is a must to bring out benefits of beverage consumption whether in terms of health, taste, relaxation, stimulation, refreshment, well-being or prestige relevant to the category.



Communication should be relevant and trendy so that consumers are able to find an appeal to go out, purchase and consume.

The beverage market has still to achieve greater penetration and also a wider spread of distribution. It is important to look at the entire beverage market, as a big opportunity, for brand and sales growth in turn to add up to the overall growth of the food and beverage industry in the economy.

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CHAPTER 2:

OBJECTIVE HYPOTHESIS RESEARCH METHODOLOGY SCOPE AND LIMITATIONS

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2.1 OBJECTIVES OF THE PROJECT

 The main objective of this project is “Mapping of the available marketing channels of HCCBPL” in Paanchvati region of Nasik  To find the comfort level of the dealers with the current distribution system  To find the lacunas in the current distribution system.  To suggest remedial measures  Study of soft drink market share by mapping in Paanchvati Nasik.

2.2

HYPOTHESIS:-

I:

“Current distribution followed by Coca-Cola is less effective”

II:

“Dissonance of the dealers is the main concern for the company”

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2.3

RESEARCH METHODOLOGY The term Research is composed of two words Re and Search. Re means again & again, Search means search about new facts. Thus the term Research can be defined as a careful investigation or enquiry specially to search new facts in any branch of knowledge. The term Research refers to the systematic method consisting of enunciating the problems, formulating the hypothesis, collecting the fact or data, analyzing the facts and reaching certain conclusion either in the form of solution toward the concerned problem or in certain generalization for some theoretical formulation. According to CLIFFORD WOODY, “Research is a careful inquiry or examination in setting the facts or principle, a diligent investigation to ascertain something.”

METHODOLOGY Methodology is the systematic and objective identification, collection analysis, dissemination, and use of information for the purpose of improving decision making related to the identification and solution of problem.

During the course of conducting the study the information were gathered mainly through the primary sources. Conducting field survey by talking to the individual and the methodology used in the survey was personal observation and interview with the consumer with the help of questionnaire.

DATA COLLECTION: The task of data collection begins after a research problem has been defined and research design has been chalked out. While deciding about the method of data collection to be used for the study, the research should keep in mind two types of data viz. Primary and Secondary. SOURCES OF DATA a)

Primary Data.

b)

Secondary Data.

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PRIMARY DATA: The Primary Data are those, which are collected afresh and for the first time and thus happen to be original in character.

The observation method is the most commonly used method especially in studies relating to behavioral sciences. Questionnaire method is also very widely used in order to give a structure to the entire study.

SECONDARY DATA: The secondary Data are those which have been already collected by someone else and which have already been passed through statistical process. The Secondary Data regarding the project was given by the company which was a list of the outlets that were to be visited.

METHODOLOGY ADOPTED FOR RESEARCH 

For this project, the method available was to get enough information through personal interaction with the outlet owners with the aid of a questionnaire. The collection of primary data requires considerable time. In this research the Primary data were obtained by actual working in the market and interacting with the outlet owners or managers who are involved in the process.



The secondary data was a list of the outlets that were to be surveyed and was given by the company.

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2.4

AREA OF RESEARCH 

Panchvati, Nashik –

From Aurangabad Naka till Godavari River & Peth Road, Dhindori Road Signal till Ram Ghat.

2.5

•

Krishna Nagar

•

Ram Ghat

•

Panchvati Circle

•

Old Panchvati

•

Gurudwara Lane

•

Nimani Circle

•

Malegoan Stand

•

Peth Fata

•

Ramwadi

INCOME GROUP •

Around 70% of the area is covered under middle income group of people.

•

10% is covered by lower-middle or lower income group.

•

Only 15% (approx) is marked by higher-middle & higher income group of people.

•

5-7% of the area is unmarked. Source: Internal (HCCBPL)

2.6

TYPES OF LAYOUT 1. E & D Outlet 2. Grocery Store(Kirana) 3. Medical 4. Pan & Beedi Shops 5. Tea Stalls 6. Convenience Store

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2.7

SCOPE:A Training Program of 60 days in any organization provides information to all students like… i)

Current organisation work-culture

ii)

Industry practical knowledge.

iii) Gives Professional touch. iv)

Better awareness about market competition.

v) Get chance to face different types of customers and tackle with different situation.

2.8

Product Range:

The entire product range that the company has was taken into consideration for the study. This includes Coca Cola, Diet Coke, Thump Up, Sprite, Limca, Fanta and Kinley Soda in the carbonated section and Maaza and Minute Maid Pulpy Orange in the juices section.

2.9

LIMITATIONS:-

i) Organization does not provide strategic information. ii) Organization does not give time and attention to the Management Trainees. iii) Time provide by institute i.e. 60 days is not sufficient to get practical knowledge. iv) Seasonality was the biggest threat because the duration of the project was in the summer. This is peak selling time for the company on the other hand in the rainy season the picture is different. That affects the sample size and also the sale. v) Finding and analysis was for the specific area (Routes) only. vi) During the project we have to trust the dealers and their perception actual situation may vary.

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CHAPTER 3:

THE COCA-COLA COMPANY

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3.1: HISTORY

Coca-Cola was first introduced by John Syth Pemberton, a pharmacist, in the year 1886 in Atlanta, Georgia when he concocted caramel-coloured syrup in a three-legged brass kettle in his backyard. He first “distributed” the product by carrying it in a jug down the street to Jacob’s Pharmacy and customers bought the drink for five cents at the soda fountain. Carbonated water was teamed with the new syrup, whether by accident or otherwise, producing a drink that was proclaimed “delicious and refreshing”, a theme that continues to echo today wherever Coca-Cola is enjoyed. Dr. Pemberton’s partner and bookkeeper, Frank M. Robinson, suggested the name and penned “Coca-Cola” in the unique flowing script that is famous worldwide even today. He suggested that “the two Cs would look well in advertising.” The first newspaper ad for Coca-Cola soon appeared in The Atlanta Journal, inviting thirsty citizens to try “the new and popular soda fountain drink.” Hand-painted oil cloth signs reading “Coca-Cola” appeared on store awnings, with the suggestions “Drink” added to inform passersby that the new beverage was for soda fountain refreshment.

By the year 1886, sales of Coca-Cola averaged nine drinks per day. The first year, Dr. Pemberton sold 25 gallons of syrup, shipped in bright red wooden kegs. Red has been a distinctive color associated with the soft drink ever since. For his efforts, Dr. Pemberton grossed $50 and spent $73.96 on advertising. Dr. Pemberton never realized the potential of the beverage he created. He gradually sold portions of his business to various partners and, just prior to his death in 1888, sold his remaining interest in Coca-Cola to Asa G. Candler, an 14

entrepreneur from Atlanta. By the year 1891, Mr. Candler proceeded to buy additional rights and acquire complete ownership and control of the Coca-Cola business. Within four years, his merchandising flair had helped expand consumption of Coca-Cola to every state and territory after which he liquidated his pharmaceutical business and focused his full attention on the soft drink. With his brother, John S. Candler, John Pemberton’s former partner Frank Robinson and two other associates, Mr. Candler formed a Georgia corporation named the Coca-Cola Company. The trademark “Coca-Cola,” used in the marketplace since 1886, was registered in the United States Patent Office on January 31, 1893.

The business continued to grow, and in 1894, the first syrup manufacturing plant outside Atlanta was opened in Dallas, Texas. Others were opened in Chicago, Illinois, and Los Angeles, California, the following year. In 1895, three years after The Coca-Cola Company’s incorporation, Mr. Candler announced in his annual report to share owners that “Coca-Cola is now drunk in every state and territory in the United States.”

As demand for Coca-Cola increased, the Company quickly outgrew its facilities. A new building erected in 1898 was the first headquarters building devoted exclusively to the production of syrup and the management of the business. In the year 1919, the Coca-Cola Company was sold to a group of investors for $25 million. Robert W. Woodruff became the President of the Company in the year 1923 and his more than sixty years of leadership took the business to unsurpassed heights of commercial success, making Coca-Cola one of the most recognized and valued brands around the world.

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3.2: MANIFESTO FOR GROWTH

3.2.1: VALUES: The values that the employees in the Company are expected to keep up to and work by regularly are as follows: 

LEADERSHIP: To take an initiative and lead, motivate and drive the team with energy and zeal, to deliver outstanding results.



INNOVATION: To continuously strive for progress and reach the next level of excellence in everything we do.



PASSION: To be deeply committed and display drive and energy in the quest to deliver outstanding performance.



TEAMWORK: To unite for greater strength and work collectively as a group towards the achievement of common goals.



OWNERSHIP: To think and act like owners at all levels; to have decisions taken at the lowest appropriate level.



ACCOUNTABILITY: To be individually and transparently accountable to our colleagues for delivering agreed targets and goals.

3.2.2: MISSION To 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; 

To Refresh the World... In body, mind, and spirit



To Inspire Moments of Optimism... Through our brands and our actions



To Create Value and Make a Difference... Everywhere we engage.



Consumers as a superior beverage experience



Consumers as an opportunity to grow profits through the use of finished drinks



Bottlers as an opportunity to grow profits in volumes



Bottlers as a trademark enhancement and positive economic value added



Suppliers as an opportunity to make reasonable profits when creating real value-added in an environment of system-wide team work, flexible business system and continuous improvement



Indian society in the form of a contribution to economic and social development. 16

3.2.3: VISION FOR SUSTAINABLE GROWTH To 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. 

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.

FIGURE 1: VISION FOR SUSTAINABLE GROWTH

3.2.4: QUALITY POLICY “To ensure customer delight, we commit to quality in our thoughts, deeds and actions by continually improving our processes…Every time.” 17

3.3 HINDUSTAN COCA-COLA BEVERAGES Pvt. Ltd. (HCCBPL)

3.3.1: ABOUT THE COMPANY Coca-Cola was the leading soft drink brand in India until 1977, when it left rather than reveals its formula to the Government and reduces its equity stake as required under the Foreign Regulation Act (FERA) which governed the operations of foreign companies in India. Coca-Cola re-entered the Indian market on 26th October 1993 after a gap of 16 years, with its launch in Agra. An agreement with the Parle Group gave the Company instant ownership of the top soft drink brands of the nation. With access to 53 of Parle’s plants and a well set bottling network, an excellent base for rapid introduction of the Company’s International brands was formed. The Coca-Cola Company acquired soft drink brands like Thumps Up, Goldspot, Limca, Maaza, which were floated by Parle, as these products had achieved a strong consumer base and formed a strong brand image in Indian market during the re-entry of Coca-Cola in 1993.Thus these products became a part of range of products of the Coca-Cola Company.

In the new liberalized and deregulated environment in 1993, Coca-Cola made its reentry into India through its 100% owned subsidiary, HCCBPL, the Indian bottling arm of the Coca-Cola Company. However, this was based on numerous commitments and stipulations which the Company agreed to implement in due course. One such major commitment was that, the Hindustan Coca-Cola Holdings would divest 49% of its shareholding in favour of resident shareholders by June 2002.

Coca-Cola is made up of 7000 local employees, 500 managers, over 60 manufacturing locations, 27 Company Owned Bottling Operations (COBO), 17 Franchisee Owned Bottling Operations (FOBO) and a network of 29 Contract Packers that facilitate the manufacture process of a range of products for the company. It also has a supporting distribution network consisting of 700,000 retail outlets and 8000 distributors. Almost all goods and services required to cater to the Indian market are made locally, with help of technology and skills within the Company. The complexity of the Indian market is reflected in the distribution fleet which includes different modes of distribution, from 10-tonne trucks to open-bay three wheelers that can navigate through narrow alleyways of Indian cities and trademarked tricycles and pushcarts. 18

“Think local, act local”, is the mantra that Coca-Cola follows, with punch lines like “Life ho to Aisi” for Urban India and “Thanda Matlab Coca-Cola” for Rural India. This resulted in a 37% growth rate in rural India visa-vie 24% growth seen in urban India. Between 2001 and 2003, the per capita consumption of cold drinks doubled due to the launch of the new packaging of 200 ml returnable glass bottles which were made available at a price of Rs.5 per bottle. This new market accounted for over 80% of India’s new Coca-Cola drinkers. At Coca-Cola, they have a long standing belief that everyone who touches their business should benefit, thereby inducing them to uphold these values, enabling the Company to achieve success, recognition and loyalty worldwide.

FIGURE 2: LOCATIONS OF COBO, FOBO & CONTRACT PACKAGING IN INDIA

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Coca-Cola Timeline 

1886 – Coca-Cola invented



1923 – Woodruff’s initiatives of Personal Training, Better Service and Quality Products introduced



1929 – Foreign Sales Group formed for global expansion



1945 – Coca-Cola established as a global brand



1952 – Coca-Cola was introduced in India



1960 – Fanta and Sprite introduced



1970 – Focus on marketing



1980 – The Coca-Cola system stabilized



1993 – Coca-Cola re-enters India



2004 – E. Neville Isdell rolls out MFG(Manifesto For Growth)

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3.3.2: ORGANIZATION STRUCTURE OF COCA-COLA

FIGURE 3: ORGANIZATION STRUCTURE IN COCA-COLA

FIGURE 4: ORGANIZATION STRUCTURE IN COCA-COLA, India

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FIGURE 5: ORGANIZATION STRUCTURE IN COCA-COLA, INDIA

FIGURE 6: ORGANIZATION STRUCTURE OF THE SALES DEPARTMENT 22

3.3.3: MANUFACTURING PROCESS AT HCCBPL

FIGURE 7: MANUFACTURING PROCESS The manufacturing of the products of Coca-Cola involves the following steps: 

Water is received from the River Cauvery and it passes through the water treatment plant, further passing through the sand filter and the activated carbon filter, so as to attain pure cleansed water.



In the syrup room, the concentrate received from another bottling plant situated at Pune, is blended with the sugar syrup



Once both the water and the final syrup are ready, they are both mixed together and sent to the carbonator section where Carbon Dioxide is added to the mixture to form the final product.



On the other hand, simultaneously, the returnable glass bottles are depalletised, inspected and washed for the purpose of filling in the final product in it.



The product is finally filled in the bottles, crowned (in case of RGB), labelled and cased in order to be sent into the warehouse for distribution.

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3.3.4: BUSINESS PLAN MODEL AT HCCBPL

FIGURE 8: BUSINESS PLAN MODEL “An efficient distribution network in FMCG has a base of a well managed production capacity”

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3.4

DISTRIBUTION NETWORK

HCCBPL has a wide and well managed network of salesmen appointed for taking up the responsibility of distribution of products to diverse parts of the cities. The distribution channels are constructed in such a way that the demand of customers is fulfilled at the right place and the right time when it is needed by them. A typical distribution chain at HCCBPL would be:

Production --- Plant Warehouse --- Depot Warehouse --- Distribution Warehouse --Retail Stock --- Retail Shelf --- Consume

The customers of the Company are divided into different categories and different routes, and every salesman is assigned to one particular route, which is to be followed by him on a daily basis. A detailed and well organized distribution system contributes to the efficiency of the salesmen. It also leads to low costs, higher sales and higher efficiency thereby leading to higher profits to the firm.

Figure 9: Distribution Chain at HCCBPL

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3.4.1: DISTRIBUTION ROUTES

The various routes formulated by HCCBPL for distribution of products are as follows: 

Key Accounts: The customers in this category collectively contribute a large chunk of the total sales of the Company. It basically consists of organizations that buy large quantities of a product in one single transaction. The Company provides goods to these customers on credit, payments being made by them after a certain period of time i.e. either a month of half a month. Examples: Clubs, fine dine restaurants, hotels, Corporate houses etc.



Future Consumption: This route consists of outlets of Coca-Cola products, wherein a considerable amount of stock is kept in order to use for future consumption. The stock does not exhaust within a day or two, instead as and when required stocks are stacked up by them so as to avoid shortage or non-availability of the product. Examples: Departmental stores, Super markets etc.



Immediate Consumption: The outlets in this route are those which require stocks on a daily basis. The stocks of products in these outlets are not stored for future use instead, are exhausted on the same day and might run a little into the next day i.e. the products are consumed at a fast pace. Examples: Small sized bars and restaurants, educational institutions etc.



General: Under this route, all the outlets that come in a particular area or an area along with its neighbouring areas are catered to. The consumption period is not taken into consideration in this particular route.

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3.4.2: DISTRIBUTION SYSTEM 

Direct distribution: In direct distribution, the bottling unit or the bottler partner has direct control over the activities of sales, delivery, and merchandising and local account management at the store level.



Indirect distribution: In indirect distribution, an organization which is not part of the Coca-Cola system has control on one or more of the distribution elements (Sales, delivery, merchandising and local account management)



Merchandising: Merchandising means communication with the consumer at the point of purchase to convey product benefit, value and Quality. Sales people and delivery personnel both have this responsibility. In certain locations special teams who go into business locations to specifically merchandise our products.

3.4.3: DEPARTMENTS INVOLVED IN THE DISTRIBUTION PROCESS The Distribution process mainly consists of three departments: 

Distribution Department: It appoints distributors and establishes a distribution network, processes approved sale orders and prepares invoices, arranges logistics and ship products, co-ordinates with distributors for collections and monitors distribution stocks and their set-up.



Finance Department: It checks credit limits and approves sales orders in compliance with the credit policy followed by the firm, records collections from distributors, periodically reconciles outstanding balances from distributors, obtains balance confirmation from distributors and follows up outstanding balances.



Shipping or Warehousing Department: It dispatches goods as per approved by order, ensures that stocks are dispatched on a FIFO basis, ensures physical control over load out area and updates warehouse stock records in a timely manner.

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3.5 SWOT ANALYSIS OF HCCBPL

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3.6

COMPETITORS TO HCCBPL

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



PepsiCo: The PepsiCo challenge, to keep up with archrival, the Coca-Cola Company never ends for the World's # 2, carbonated soft drink maker. The company's soft drinks include Pepsi, Mountain Dew, and Slice. Cola is not the company's only beverage; PepsiCo sells Tropicana orange juice brands, Gatorade sports drink, and Aquafina water. PepsiCo also sells Dole juices and Lipton ready-to-drink tea. PepsiCo and Coca-Cola hold together, a market share of 95% out of which 60.8% is held by Coca-Cola and the rest belongs to Pepsi.

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

Nestlé: Nestle does not give that tough a competition to Coca-Cola as it mainly deals with milk products, Baby foods and Chocolates. But the iced tea that is Nestea which has been introduced into the market by Nestle provides a considerable amount of competition to the products of the Company. Iced tea is one of the closest substitutes to the Colas as it is a thirst quencher and it is healthier when compared to fizz drinks. The flavoured milk products also have become substitutes to the products of the company due to growing health awareness among people.



Dabur: Dabur in India, is one of the most trusted brands as it has been operating ever since times and people have laid all their trust in the Company and the products of the Company. Apart from food products, Dabur has introduced into the market Real Juice which is packaged fresh fruit juice. These products give a strong competition to Maaza and the latest product Minute Maid Pulpy Orange.



Parle Agro

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3.7

PRODUCTS

The Coca-Cola Company offers a wide range of products to the customers including beverages, fruit juices and bottled mineral water. The Company is always looking to innovate and come up with, either complete new products or new ways to bottle or pack the existing drinks. The Coca-Cola Company has a wide range of products out of which the following products are marketed by HCCBPL:

· In the Cola Section:

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· In the Lemon section:

· In the Orange section:

32

· In the Juice section:

· In the Soda Water and Bottled Mineral Water section:

·

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Chapter 4:

DATA PRESENTATION & DATA ANALYSIS

34

Graph No: 4.1 [Type of Monopolies]

Type of Monopolies 37%

7%

Shared Coke

11%

Pepsi

45%

Virgin



There were total 130 outlets surveyed for checking the service provided by the distributor in the Panchvati region of Nasik.



Of these, monopoly outlets details is as under:

Table No: 4.1 [Type of Monopolies] Particulars Coke Shared Pepsi Virgin Total

Number 59 48 14 9 130

Graph No: 4.2 [Visi-Coolers]

% of Visi Coolers Coke

Pepsi 39%

61%

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4.1

SERVICE QUALITY PROVIDED BY THE DISTRIBUTOR

Following table and graph gives the information about the quality & efficiency in service provided by the distributor and the pre-seller to the retailers. 

It is classified as very good, good, ok, bad & very bad. [For questions 1, 2 & 3: 1 – Very Good 2 – Good 3 – Ok 4 – Bad 5 – Very Bad]

Analysis is tabulated and graphical represented are as follows. Table No: 4.2 [Service Quality provided by the Distributor] Particulars 1. Very Good 2. Good 3. Ok 4. Bad 5. Very Bad Total

Service Quality 13 47 22 21 4 107

Percentage (%) 10 36 17 16 3

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Graph No: 4.3 [Service Quality provided by the Distributor]

Interpretation:

1. 10% of the retailers are very well satisfied with the service provided by the distributor. 2. 36% of them feel that the quality of service provided is good. 3. 17% of the retailers feel satisfactory enough by the quality of service provided. 4. 16% of the retailers are not happy with the service provided to them. 5. 3% of them feel completely dissatisfied by the service of the distributor. 6. Remaining 18% are either having Pepsi monopoly or they have not yet started their outlet for any beverages (i.e. they are virgin outlets)

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4.2

SERVICE QUALITY PROVIDED BY THE PRE-SELLER

Table No: 4.3 [Service Quality provided by the Pre-Seller] Particulars 1. Very Good 2. Good 3. Ok 4. Bad 5. Very Bad Total

Service Quality 5 27 36 30 9 107

Percentage (%) 4 21 28 23 7

Graph No: 4.4 [Service Quality provided by the Pre-Seller]

Interpretation: 1. Only 4% of the retailers are very well satisfied with the service provided by the preseller. 2. 21% of them feel that the quality of service provided is good. 3. 28% of the retailers feel that the quality of service provided by the pre-seller is average. 4. 23% of the retailers are not happy with the service provided to them. 5. 7% of them feel completely dissatisfied by the service of the distributor pre-seller. 6. Remaining 18% are either having Pepsi monopoly or they have not yet started their outlet for any beverages (i.e. they are virgin outlets) 38

4.3

SERVICE EFFICIENCY PROVIDED BY THE DISTRIBUTOR

Table No: 4.4 [Service Efficiency provided by the Distributor] Particulars 1. Very Good 2. Good 3. Ok 4. Bad 5. Very Bad Total

Service Quality 8 31 33 25 10 107

Percentage (%) 6 24 25 19 8

Graph No: 4.5 [Service Efficiency provided by the Distributor]

Interpretation: 1. 6% of the retailers are very well satisfied with the service provided by the distributor. 2. 24% of them feel that the quality of service provided is good. 3. 25% of the retailers feel satisfactory enough by the quality of service provided. 4. 19% of the retailers are not happy with the service provided to them. 5. 8% of them feel completely dissatisfied by the service of the distributor. 6. Remaining 18% are virgin outlets.

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4.4

FREQUENCY OF SERVICE PROVIDED BY THE DISTRIBUTOR

Table No: 4.5 [Frequency of Service provided by the Distributor] Particulars  Twice a week  Weekly  Fortnightly  Infrequent  Uncovered Outlets Total

Service Frequency 56 27 7 17 23 130

Percentage (%) 43 22 5 12 18

Graph No: 4.6 [Frequency of Service provided by the Distributor]

Interpretation:  The above graph shows that the frequency of service for majority of the retail outlets is very good with 43% covering 56 of 130 outlets. This means that the majority of the retail outlets in the Panchvati area of Nasik are filled with CocaCola stock twice every week.  This is followed by 21% of the outlets which are served weekly.  However, the number of uncovered outlets is 23, which constitute 18% of the entire Panchvati region. This is quite a large number, which the distributor will have to take note of inorder to improve his business.

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4.5

SCHEMES PROVIDED BY THE DISTRIBUTOR

Table No: 4.6 [Schemes provided by the Distributor] Particulars  Yes  No  Occasionally  Uncovered Outlets Total

Service Frequency 27 41 39 23 130

Percentage (%) 21 31 30 18

Graph No: 4.7 [Schemes provided by the Distributor]

Interpretation: This shows that the distributor does not provide enough schemes on a regular basis to the retail outlets.  31% of them do not receive any schemes, and 30% receive the schemes occasionally.  Hence, only 21% of the retail outlets are well served which fetches them the majority of the business.

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4.6 TIMELY AVAILABILITY OF REQUIRED ORDER

Table No: 4.7 Particulars  Yes  No  Uncovered Outlets Total

Service Frequency 55 52 23 130

Percentage (%) 42 40 18

Graph No: 4.8

Interpretation:  42% of the outlets receive order as per required, whereas 40% of them do not receive orders as per required.  There is a good potential scope of improvement by the distributor in the areas of uncovered outlets (18%) as well as those outlets which do not get the order as per requirement (40%)

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4.7 MONTHLY SALES Graph No: 4.9.1

Interpretation:  The sales for coca-cola products exceed the same for those of pepsi products.  However, the sale of coca-cola products is low as compared to its sale in the entire Nasik district which is approx. 78% (Source: Survey report by AC Nielsen)

Graph No: 4.9.2

Monthly Stock – May’09(in crates)

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4.8

DISPLAY & MERCHANDISE PROVIDED BY THE DISTRIBUTOR

Table No: 4.8 [Display & Merchandise provided by the Distributor] Particulars  Yes  No  Occasionally  Uncovered Outlets Total

Display Facilities 34 25 48 23 130

Percentage (%) 26 19 37 18

Graph No: 4.10 [Display & Merchandise provided by the Distributor]

Interpretation: This shows that the distributor does provide enough schemes on a regular basis to the retail outlets.  26% of them do receive sufficient display facility & merchandise; and also, 37% receive the schemes occasionally.  Only 19% of the retail outlets are not well served.

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4.9

GRIEVANCE REDRESSED BY THE DISTRIBUTOR

Table No: 4.9 [Grievance redressed by the Distributor] Particulars  Yes  No  Only if Pressurized  Uncovered Outlets Total

Display Facilities 25 38 44 23 130

Graph No: 4.11 [Grievance redressed by the Distributor]

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Percentage (%) 19 29 34 18

4.10

OTHER PARTY PURCHASES

Table No: 4.10 [Other party purchases] Particulars  Yes  No  Sometimes  Uncovered Outlets Total

Display Facilities 4 92 11 23 130

Graph No: 4.12.1 [Other party purchases]

Graph No: 4.10.2 [Other party purchases]

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Percentage (%) 3 71 8 18

Chapter 5:

CONCLUSION & SUGGESTION

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5.1

CONCLUSION

The conclusions drawn from the project study are as follows:  There were total 130 outlets surveyed for checking the service provided by the distributor in the Panchvati region of Nasik. Of these, monopoly outlets details are as under: Particulars Coke Shared Pepsi Virgin Total

Number 59 48 14 9 130

 The sales for Coca-Cola products exceed the same for those of Pepsi products. However, the sale of coca-cola products is low as compared to its sale in the entire Nasik district which is approx. 78% (Source: Survey report by AC Nielsen).  Majority of the retail outlets receive sufficient display facility & merchandise.  42% of the outlets receive order as per required, whereas 40% of them do not receive orders as per required. There is a good potential scope of improvement by the distributor in the areas of uncovered outlets (18%) as well as those outlets which do not get the order as per requirement (40%).  31% of them do not receive any schemes, and 30% receive the schemes occasionally. Only 21% of the retail outlets fetch Coca-cola the majority of the business. Hence, there is a tremendous scope for the company to progress in this area.  The frequency of service for majority of the retail outlets is very good with covering 56 of 130 outlets. Majority of the retail outlets in the Panchvati area of Nasik (approx. 43%) are filled with Coca-Cola stock twice every week. However, the number of uncovered outlets is 23, which constitute 18% of the entire Panchvati region. This is quite a large number, which the distributor will have to take into account inorder to improve his business. 48

 Approx 60% of the retailers are satisfied with the service provided by the distributor (Gaikhe Sales) in Panchvati area of Nasik.  28% of the retailers feel that the quality of service provided by the pre-seller is average. Also, approx. 30% of the retailers are not satisfied by the service provided by the retailers. Around 18% of the retail outlets form a part of either Pepsi monopoly or that are not served at all, from a part of the pre-sellers duty to convert them into coca-cola monopoly or shared outlet.  But the overall efficiency of the distribution in the Panchvati region of coca-cola products is hampered due to the fact that it has a sale of 68% as compared to its sale in the entire Nasik district which is approx. 78% (Source: Internal Source as well as survey report by AC Nielsen)

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5.2

RECOMMENDATION

We can sum the recommendations in brief as follows:  Communications should be improved by fulfilling the demand of product by company. In the field, sales persons work independently and away from the office. Good communication requires interaction between those preparing and those receiving reports.  Company should make plans and impart training to the salesperson for better their performance.  Aggressive Marketing by market developer for increasing the sales volume.  Regular visit to distributors for better co-ordination.  Improve the market share by: o providing efficient & effective distribution o catering to busy retailers atleast 3 times a week o widening the region(i.e. area of sales)  Company should adhere to and implement the customers’ suggestions and complaints about products, service policies, price changes, advertising, etc.  Increase in the number of sales vehicles.  Provide better schemes & services inorder to gain market share.

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ANNEXURES

51

ANNEXURE 1: QUESTIONNAIRE 1 Name of the Shop: ____________________________________________. Location: ______________________.

Shop Code: ___________________.

Type of Monopoly: _____________.

Visi – Cooler Status:

CK/

PC

______________________________________________________________________________________________________________________

Rating Scale: (1 – Very Good; 2 – Good; 3 – Ok; 4 – Bad; 5 – Very Bad.) Particulars

1

2

3

4

5

1) How is the service provided by the distributor? 2) How is the service provided by the pre-seller? 3) How is the efficiency of the delivery by the distributor?

4)

5)

What is the frequency of the delivery? Twice a Week

Weekly

Fortnightly

Infrequent

Does the distributor give good schemes? Yes

6)

8)

Occasionally

Do you get the order as per your requirement? Yes

7)

No

No

What are your sales for Coca-Cola products for the month of May’09(in Rs.)? 300 – 700

700 – 1100

1100 – 1500

1500 & above

What are your sales for competitors’ products (viz. Pepsi) for the month of May’09(in Rs)? 0 – 400

400 – 800

800 – 1200

1200 & above

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9)

Does the distributor provide you with display facilities such as banners, hoardings, menu, cooler, racks, etc? Yes

10)

No

Only if Pressurised

Do you approach any other party (retailers, malls, etc.) for your purchases? Yes

12)

Occasionally

Does the distributor respond to your grievances, if any, in a timely manner? Yes

11)

No

No

Sometimes

If yes, whom do you approach? (in relation to question no. 11)

`

Other Retailers

Malls

Sub – dealers

Others

Thank You

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ANNEXURE 2: QUESTIONNAIRE 2

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ANNEXURE 3 – GOOGLE MAPS

55

GLOSSARY OF TERMS Abbreviation

Acronym

HCCBPL

Hindustan coca cola beverages Pvt. Ltd.

E&D

Eating and Drinking

RGB

Returnable Glass Bottle

PET

Polyethylene Terephthalate

CK

Coke

PC

Pepsi

SH

Shared

VG

Virgin

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BIBLIOGRAPHY INTERNET: • http://www.coca-cola.com/index.jsp •

http://www.thecoca-colacompany.com

•

http://www.ko.com

•

http://www.hoovers.com

•

Google-maps

•

http://in.nielsen.com/site/index.shtml

• http://www.pepsico.com/Brands/Pepsi_Cola-Brands.html BOOKS & MAGAZINES: •

Monthly circular for the month of March, April, May and June - HCCBPL

•

Kumar, Aaker & Day, Essentials of Marketing Research 2nd Edition

•

Kotler Philip & Keller Kelvin , Marketing Management, 12th Edition

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