HINDUSTAN COCA-COLA BEVERAGES PRIVATE LIMITED PROJECT REPORT

Monitoring the health of a channel partner

ALLIANCE SCHOL OF MANAGEMENT M.B.A (2012-2014) NAVEEN DSOUZA

College

TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION CHAPTER 2: HINDUSTAN COCA-COLA BEVERAGES PRIVATE LIMITED (HCCBPL) CHAPTER 3: ORGANIZATION STRUCTURE OF COCA-COLA CHAPTER 4: DIVISIONS WITHIN COCA-COLA CHAPTER 5: NATURE OF BUSINNESS WITHI ALTERNATIVE BEVERAGES CHAPTER 6: DISTRIBUTION MODEL FOLLOWED CHAPTER 7: PARAMETERS WHICH DETERMINE THE HEALTH OF A CHALLEP PARTNER CHAPTER 8: SUGGESTIVE METHODS TO INCREASE THE HEALTH OF A CHANNEL PARTNER CHAPER 9: CONCLUSION

CHAPTER 1: INTRODUCTION
_______________________________________________
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 worlds 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 Companys beverage products comprises of bottled and canned soft drinks as well as concentrates, syrups and not-ready-todrink 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 worlds 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. The associates of this Company jointly take responsibility to ensure compliance with the framework of policies and protect the Companys assets and resources whilst limiting business risks.

CHAPTER 2: HINDUSTAN COCA-COLA BEVERAGES PRIVATE LIMITED (HCCBPL) _______________________________________________

ABOUT THE COMPANY
Coca-Cola was the leading soft drink brand in India until 1977, when it left rather than reveal its formula to the Government and reduce 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 Parles plants and a well set bottling network, an excellent base for rapid introduction of the Companys 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 re-entry 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 favor 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. 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 Indias 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.

2.1: VALUES, MISSION AND VISION OF

(HCCBPL)

VALUES:
Coca-Cola is guided by shared values that both the employees as individuals and the Company will live by; the values being: LEADERSHIP: The courage to shape a better future PASSION: Committed in heart and mind INTEGRITY: Be real ACCOUNTABILITY: If it is to be, its up to me COLLABORATION: Leverage collective genius

INNOVATION: Seek, imagine, create, delight QUALITY: What we do, we do well

MISSION
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.

VISION FOR SUSTAINABLE GROWTH

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.

2.2: 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 CocaCola Company has a wide range of products out of which the following products are marketed by HCCBPL:

In the CARBONATED SOFT DRINKS (CSD):

In the Fanta section:

Fanta apple Fanta grape

In the Juice section:

In Minute Maid section:

Puply Orange Mango Grape Mixed fruit Linbu fresh

In Schweppes section: Soda Water TONIC Water and GINGER Ale

 In KINLEY section:

In Energy drink section:

2.3: PACKAGING DETAILS

Coca-Cola, Thums Up, Fanta Limca and Sprite: 330 ml can, 200 ml and 300 ml returnable glass bottles; 500+100 ml free, 1.5 litre and 2 litre PET bottles Diet Coke: 330 ml can and 600 ml PET bottle Maaza: 200 ml and 250 ml Returnable Glass Bottle; 500+100 ml free and 1litre+200 ml free PET bottles and the newly introduced 200 ml Tetra Pack Minute Maid: 400 ml and 1 litre PET bottles Schweppes Soda Water: 300 ml returnable glass bottles Schweppes Ginger Ale: 330 ml can Schweppes Tonic Water: 330 ml can, 300ml returnable glass bottles Kinley Soda Water: 300 ml returnable glass bottles, 500+100 ml free and 1.5 litre PET bottles.

CHAPTER 3: ORGANIZATION STRUCTURE OF COCA-COLA _______________________________________________ ORGANIZATION STRUCTURE OF COCA-COLA IN INDIA

Chief Executive Officer

Vice President Supply Chain

Chief Finance Officer

Human Resource Director

Vice President BSG

Regional Vice President (North)

Regional Vice President (Central)

3.1: ORGANIZATION STRUCTURE OF THE SALES DEPARTMENT IN HCCBPL:

AGM/AOD

Human

Plant Manager

Route to Market

Resource Manager

Finance Manager

General Sales Manager

Area Area Sales Manager Channel Manager Capability Manager

Sales Executive

Sales Trainers Marketing

Market Developer

Key Accounts

Distributors And Salesmen

CHAPTER 4: Divisions within COCA-COLA

There are 2 main divisions within coca-cola they are Mainline Alternative beverages

Under Mainline coca-cola has

Maaza Kinley Water Kinley soda and All returnable glass bottle (RGB) Such as Coke, Fanta, Maaza, Thums up, Limca, Sprite etc And even pet bottles such as Coke, Diet coke Fanta, Maaza, Thums up, Limca, Sprite etc

Under alternative beverages coca-cola has

Minute Maid juice All Flavors of Fanta All cans of the products such as Coke, Diet coke Fanta, Maaza, Thums up, Limca, Sprite etc All products of Schweppes such as Tonic water, Soda, Ginger Ale Burn energy drink

CHAPTER 5: Nature of business within alternative beverages

Under alternative beverages there are two main divisions they are:

Key accounts General trade Under Key Accounts there are

Schools and colleges Institutions Business tech parks Canteens MRP liquor shops Clubs Pubs Dance bars Discotheque Movie theaters Restaurants Coffee shops etc

Under General Trade there are

Bakeries Kirana stores Grocery stores Super markets Small kiosks Bars etc

CHAPTER 6: Distribution model followed in coca-cola

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 --- Consumer 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.

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 neighboring areas are catered to. The consumption period is not taken into consideration in this particular route.

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)

CHAPTER 7: Parameters which determine the health of a Channel Partner

In order to determine the health of a channel partner below there is a swot analysis about sai eshwari enterprises

Strengths
1. Customers typically rebel against price increases by switching to competing products, but if a company has pricing power, customers will continue using Channel partners products and services. Channel partner has the ability to charge customers higher prices 2. Channel partners get a profit margin of 4% 3. If the products gets expiry the company will take the products in return and as an exchange the company will provide the fresh stock to the channel partners 4. Size advantages lower Channel partners risks. The larger Channel partner gets, the more resources they have to pursue new markets and defend themselves against rivals 5. Lower costs lead to higher profits for Channel partner. A low cost leader can undercut rivals on price 6. When given a choice, customers are loyal to Channel partner. Instead of targeting all customers, Channel partner only needs to target new customers in order to grow their business 7. A strong brand name is a major strength of Channel partner. This helps Channel partner to distribute their the products easily to their targeted costumers because consumers place additional value in the brand

Weaknesses
1. An inefficient work environment means that Channel partners goods and services are not being utilized properly 2. A high debt burden increases the risk that Channel partner goes bankrupt if they make a poor business decision. Increasing risks can increase Channel partners debt interest payments 3. Weak customer service hurts Channel partners reputation and causes customers to flee to competitors, who are more respondent 4. A weak supply chain can delay the arrival of products to Channel partners customers. Unnecessary delays can hurt Channel partner over the long run, because customers will cancel orders 5. There is a high staff turnover in distributors place

Opportunities
1. Leveraging the balance sheet allows Channel partner to quickly expand into other markets and products 2. New services help Channel partner to better meet their customers needs. These services can expand Channel partners business and diversify their customer base 3. Emerging markets are fast growing regions of the world that enable Channel partner to quickly expand 4. New markets allow Channel partner to expand their business and diversify their portfolio of products and services

Threats
1. Mature markets are competitive. In order for Channel partner to grow in a mature market, it has to increase market share, which is difficult and expensive 2. The availability of substitute products hurts Channel partners ability to raise prices, because customers can easily switch to another product or service (for Eg:- Del Monte products) 3. Intense completion can lower Channel partners profits, because competitors can entice consumers away with superior products 4. Consumers can change their tastes very quickly. Channel partner depends on knowing which goods and services consumers want

CHAPTER 8: Suggestive methods to increase the health of a Channel Partner

The supply of the products must be improved because many customers

face the problem of irregular supply

The credit payback period must be increased from 1 month to 45 days

or their must be a change in policy of cash on delivery

The channel partner has to concentrate more on the outlets which located
in north Bangalore such as in Devanahalli and yelahanka

The channel partner has to concentrate in cracking new outlets Their must be a proper time should be fixed for PSR in order to visit the
market because many of the PSRs are not regular in time properly in the markets

The salary of the PSRs must be increased then they would work The channel partners should not treat all the customers in a similar
Golden customers: The customers who buy large N.O of stock Eg: Mudhuloka, Drops, DPS etc Silver customers: The customers who buy average N.O of stock Eg: Volga wines, SLNS wines, wine yard, spritz and more etc Bronze customers: The customers who buy limited N.O of stock Eg: college canteens, small restaurants etc

manner, The customers should be divided into three groups such as

The PSRs should daily report to the distributors place

CHAPTER 8: CONCLUSION

The activity was a good experience in the area of Sales. It gave me a good amount of exposure mainly because after being trained, I got an opportunity to carry out the process with the help of ASM Team leader and PSRs. It helped me in developing a considerable amount of convincing skills, because, it took a lot of it to convincing the store managers to buy the products and even in collecting cheques and even more to convince the customers to buy new products which they werent selling before. A good understanding of the market was accomplished as I spoke to many people and that group consisted of a variety of customers. This even helped in the polishing of communication skills, a must-have to survive and make it big in the present world. It even gave a good understanding of behavior of customers when placed in different situations. It was a good opportunity to work on the skill of patience, as a large number of customers were to be dealt with. It helped in developing the kind of relations one needs to uphold in the corporate world and it helped in building up the right attitude. As all the points in the above mentioned paragraph, are the must-have skills for anyone in the field of Marketing and Sales, the training period was a good experience and a good stepping stone into the real business world.