Acknowledgement

We would, first and foremost, like to thank God Almighty for his perpetual blessings and guidance throughout this project. We express our deep sense of gratitude to the Director encouragement for doing this project. His Prof. R.P.Singh, benefited

Amity Business School, for providing us an opportunity and continuous suggestions immensely. Further he also provided us with valuable inputs and guidance in writing this project. We also thanks to Mrs. Charu Bisaria, Mrs. Khushboo Agnihotri and Mr. Apoorva for their valuable guidance, co-operation and support with out which this project would not have been successful. Last but not the least, we thank our family and well wisher Mr. Ajay Shukla for their encouragement and support with which this report would not have materialized.

Table of Contents
1. Introduction 1.1 1.2 1.3 1.4 Overview Background of the study Objectives Methodology

2. Company Profile 2.1 2.2 2.3 2.4 2.5 2.6 Introduction to the company Company Beliefs History of Coca Cola Some Coca Cola Brands worldwide Hindustan Coca Cola Beverages HCCBL operations in Banglore

3. Findings 3.1 Business familiarization process 3.2 Canteen Status Department 3.3 Foodworld 4. Conclusions and Recommendations 5. Bibliography

MARKETING STRATEGY OF COCA-COLA

Introduction
1.1 Overview
Globally, the FMCG sector has been successful in selling products to the lower and middle income groups, and the same is true in India. Over 70 per cent of sales is made to middle class households today, and over 50 per cent is in rural India. There is greater emphasis on packaging and branding today. Realisation that packaging and branding can add value both to consumers and manufacturers is growing today. Packaging can help not only in reducing perishability but can also influence the entire value chain. Growth in the FMCG sector has been below potential. It is only in personal care and hygiene sub-segments that there has been an explosion of players. The FMCG sector is yet to see the next level of innovations. Very few MNCs looked at India aggressively. Most MNCs consider India as an extra-tough market, where the need to localise is greater. Regulatory environment too was not conducive. The market itself was not open. Opportunities were not enough. Of all the sectors, FMCG has been the slowest to reform. The unorganised FMCG sector in India will see a slight shift downwards. So will the unprocessed sector. Small-scale players will still remain and they are not going to vanish overnight. Ten years from now, they will all be there. But, the Indian FMCG landscape will be more MNC-oriented, especially in personal care. Stronger MNC players are bound to emerge. In food, both domestic players and MNCs in the Indian FMCG industry will expand their pies substantially, and we are likely to see emergence of large players. There will be an increase in volumes driven by lower prices in the case of organised retailers, 4

due to their superior cost structure. This has been the experience in most emerging markets, such as Poland and South East Asia.

1.2

Background of the study

To bring about the best penetration possible for any FMCG product, the best way is to exploit as many channels of distribution as possible. For a company like Coca Cola, the number of possible channels range from the smallest corner shop to the largest of supermarkets. Therefore to keep the market exposure increasing, it is necessary to bring in innovation in new channels of distribution and work out feasible business models for these distribution channels. A channel that has been exploited very successfully for many FMCG products is through the channel of gas stations. Particularly in the West, gas stations are huge entities by themselves that cater to a variety of needs of the customers, such as lodging, air, services, drive-in washes, and refreshments. Therefore, all varieties of drinks are made available at these gas stations. To carry forward this concept, loose drinks are also being sold there, and this concept is very popular and successful there. Keeping in view the background of the study, the general objective is to evaluate the various business models and develop a new business model for the key accounts of Coca Cola India.

1.3

Objectives 1.3.1 Phase 1 To understand the distribution network and the operational
details of the business by going on a route riding exercise

1.3.2 Phase 2 To analyse the data provided by the company and find out the
Canteen Stores Department (CSD) market shares for the various cities.

1.3.3 Phase 3 To ascertain the weighted average collection period after

correlating the invoices of billing with the payments for Foodworld for the months of March, April and May for the stores in Bangalore, Hyderabad and Chennai.

1.4

Methodology 1.4.1 Type of research

The types of research undertaken are different for the various phases of the project. Therefore the types of research are mentioned separately for each of the phases.

Phase 1 Descriptive research. Phase 2 Quantitative research. Phase 3 Quantitative research. Phase 4 Applied research.

1.4.2 Sample design 1.4.2.1 Sampling frame

The sampling frame differs for the different phases in the project.

Phase 1 5 routes that were observed out of a total of 32,

Ganganagar, Tannery Road, Foodworld, Sankey Road, and Sanjayanagar.

Phase 2 No sample was used for this phase. Phase 3 No sample was used for this phase.

1.4.2.2

Sampling technique Phase 1-Non-probabilistic sampling based on importance of

routes.

Phase 2 No sample was used for this phase. Phase 3 No sample was used for this phase.

1.4.2.3

Sample size Phase 1 16 routes. Phase 2 No sample was used for this phase. Phase 3 No sample was used for this phase.

1.4.3 Data collection Phase 1 Primary data through questionnaire method. Phase 2 Secondary data provided by the company. Phase 3Secondary data provided by the companys distribution agency. Phase 4 Primary data through schedules.

1.4.4 Research instrument Phase 1 ITMO form, a document used to observe the stock
movements along the route.

Phase 2 No research instrument used. Phase 3 No research instrument used.

1.4.5

Statistical Analysis Phase 1 No statistical analysis undertaken. Phase 2 Calculation of market share using percentages on the sales
data provided.

Phase 3 Calculation of weighted average collection period based on

the calculated number of days between invoice billing date and payment date.

Phase 4 No statistical analysis undertaken.

1.4.6 Duration of study

The period of the study was from 6th of Aug 2007 till 25th of Sep 2007, duration of 80 days.

1.4.7 Area of study

The various phases of the study were conducted in the following areas of the city

Phase 1 For the Route Riding exercise, the observations were made at
the Bangalore North Depot located at Hebbal and the selected 5 routes in the areas of Ganganagar, Tannery Road, Sanjayanagar, Sankey Road, and Foodworld stores across the city of Bangalore.

Phase 2 All the data was provided by the company, so no study was
undertaken in the market.

Phase 3 All the data was provided by the company, so no study was
undertaken in the market.

Company Profile
2.1 Introduction to the company
The Coca-Cola Company exists to benefit and refresh everyone it touches. Founded in 1886, the Company is the world's leading manufacturer, marketer, and distributor of non-alcoholic beverage concentrates and syrups, used to produce more than 300 beverage brands. Their corporate headquarters are in Atlanta, with local operations in over 200 countries around the world.

2.2

Company beliefs
There is much in our world to celebrate, refresh, strengthen and protect. The Coca-Cola Company is a vibrant network of people, in over 200 countries, putting citizenship into action. Through their actions as local citizens, they strive every day to refresh the marketplace, enrich the workplace, protect the environment and strengthen our communities. They are a local employer, with responsibility to enable their people to tap into their full potential; working at their innovative best and representing the diversity of the world they serve. They are an investor in local economies and a driver of marketplace innovation, with a responsibility to act as a good steward of our natural environment. And they are a local citizen, understanding their responsibility to contribute to an improved quality of life in our communities.

2.2.1 Coca Cola Promise

The Coca-Cola Company exists to benefit and refresh very one it touches. The basic proposition of their business is simple, solid and timeless. When they bring refreshment, value, joy and fun to their stakeholders, then they successfully nurture and protect their brands, particularly Coca-Cola. That is the key to fulfilling their ultimate obligation to provide consistently attractive returns to the owners of their business.

2.2.2 Marketplace beliefs

More than a billion times every day, thirsty people around the world reach for Coca-Cola products for refreshment. They deserve the highest quality every time. Their promise to deliver that quality is the most important promise they make. And it involves a worldwide, yet distinctively local, network of bottling partners, suppliers, distributors and retailers whose success is paramount to their own. Their investment in local communities in over 200 countries totals billions of dollars in jobs, facilities, marketing, the purchase of local goods and services, and local business partnerships. Always and everywhere, they pursue continuous innovation in the products they offer, the processes they use to make them, the packages they develop and the ways they bring them to market.

2.2.3 Workplace beliefs

The Coca-Cola system is one of the most diverse organizations on earth, with a rich mosaic of talented colleagues who bring a variety of intellectual, professional, ethnic and cultural perspectives to their enterprise. They reflect the nations, cultures and languages of the world.

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Their policy is to foster an inclusive environment that encourages all employees to develop and perform to their fullest potential. Their workplace must be a place where everyone's ideas and contributions are valued. Their employees deserve equal treatment under their policies governing compensation, advancement, health, safety and other aspects of workplace life. They understand that fairness in the workplace, coupled with the opportunity to develop individual capabilities, fosters their collective success.

2.2.4 Environmental beliefs

Responsible stewardship of the environment is a top priority for The Coca-Cola Company. By preserving and enhancing our natural world, they brighten the future for our planet and for each other. They put this principle into practice through The Coca-Cola Environmental Management System, known as eKOsystem. They operate their business as stewards of the environment, with a commitment to continually move their business toward sustainability: striving to consume fewer natural resources, and to recover and reuse resources

more extensively. Their commitment to protect the environment extends throughout their organization, involving officers, managers and employees at all levels. They are accountable for their actions, conducting assessments of their environmental performance and taking action toward continuous improvement in all that they do.

2.2.5 Community beliefs

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Society advances on the strength of community: people sharing their ideas and resources to reach common goals. They seek to strengthen local communities worldwide through their support for education, through partnerships with other organizations and through acts of citizenship by the people of Coca-Cola. They support education because of its power to expand opportunities for individuals and increase understanding between cultures. They partner with national and international organizations to alleviate economic disadvantage and help improve the quality of life in local communities. Together with their local bottling partners, they strengthen communities by giving with their hands and their hearts, as partners in the promise of a better life.

2.3

History of Coca Cola

On May 8, 1886, Atlanta druggist Dr. John Styth Pemberton (former Confederate officer) invented "Coca-Cola" syrup using melted sugar, water and other ingredients. It was mixed in a 30-gal. brass kettle hung over a Backyard fire. It was marketed as a "brain and nerve tonic" in drugstores. Sales averaged 9 drinks per day. Frank M. Robinson, Pemberton's bookkeeper, was the person who suggested the name "Coca-Cola", which was chosen because both words actually named two ingredients found in the syrup. They were the coca leaf and the Kola nut. Robinson spelled Kola with a C to make it look better in advertising. The first year's gross sales were $50 and advertising costs were $73.96. The original formula included extracts of the African kola nut and coca leaves, both strong stimulants. "Coca-Cola" was one of thousands of exotic patent medicines sold in the 1800s that actually contained traces of cocaine. One summer, in 1886, a customer walked into a drugstore complaining of a headache and requested a bottle of "Coca-Cola" syrup. To get instant relief, he

12

asked the "soda jerk" to mix up a glass on the spot. Rather than walk to the other end of the counter in order to mix it with cold tap water, the clerk suggested using soda water. The man remarked it really tasted great, and soon after "Coca-Cola" was in fizzy, carbonated form. "Coca-Cola" was first sold for 5 a glass as a soda fountain drink at Jacob's Pharmacy in Atlanta, Georgia. In 1888, Asa Griggs Candler bought the company from Dr. Pemberton. Later that same year, Dr. Pemberton died. By 1914, Candler had acquired a fortune of some $50 million. Baseball hall of fame Ty Cobb, a Georgia native, was another early investor in the company. In 1891, Coca-Cola produced its first calendar. In 1894, Joseph A. Biedenharn, owner of the Biedenharn Candy Company in Vicksburg, Mississippi, first bottled "Coca-Cola." By 1903, the use of cocaine was controversial and "Coca-Cola" decided to use only "spent coca leaves." It also stopped advertising "Coca-Cola" as a cure for headaches and other ills. In 1919, after his death, Griggs Candler's family sold the interest in "Coca-Cola" to a group of businessmen led by Ernest Woodruff for $25 million. Woodruff was appointed president of "Coca-Cola" on April 28, 1923 and stayed on the job until 1955.

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The first type of bottle "Coke" came in was the Hutchinson stopper-type glass bottle that utilized an iron stopper and rubber washer. Joseph Biedenharn, the first bottler, originally used this type of bottle. "Coca-Cola" was usually written in script or block print in the glass front.

Picture : Earliest Coke bottle DATES: 1894 - early 1900's

The second type of "Coke" bottle was the crown-top, straight-sided, and utilized a cap instead of a stopper. Millions of these bottles were used until imitations became a problem. These bottles came in amber, clear and light green colors, and were also the first to have labels on them.

Picture : Early Coke bottle

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The latest type of bottle used is known today as the "hobbleskirt" or contour bottle. The bottle was invented specifically for "Coca-Cola" by the Chapman Root Glass Company of Terre Haute, Indiana. They modeled the bottle after a cocoa bean. The bottle was first patented on November 16, 1915, and renewed on December 25, 1923. The actual shape of the bottle was patented in 1960. CocaCola first introduced 10, 12 and 26 ounce bottles in 1955.

Picture : Present Coke bottle DATES: 1915 today First bottler of coca-cola
In the summer of 1894, Joseph Agustus Biedenharn, a 28 year-old candy merchant from Vicksburg, Mississippi, offered the first bottle of "Coca-Cola." It was originally sold at just soda fountains. Biedenharn sold to rural areas around Vicksburg.

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2.4

Some Coca Cola brands worldwide

2.2.6 Coca Cola Trivia "Coca-Cola" is the world's most recognized

trademark...recognized by 94% of the world's population. More than five billion bottles of "Coca-Cola" were consumed by military personnel during World War II. The presence of "Coca-Cola" did more than lift the morale of the troops. In many areas, it gave local people in those countries their first taste of "Coke" and paved the way for unprecedented worldwide growth for "Coca-Cola" after the war.
Every second of every day there are approximately 9,600 soft

drinks from The Coca-Cola Company are consumed. The

16

Company sells nearly half of all the soft drinks consumed around the world.

By the 1950's, automobile service stations sold more "Coke" than they did motor oil. One share of Coca-Cola Company stock, initially bought for $40, is now worth over $16,000. In July 1985, "Coca-Cola" became the first soft drink to be enjoyed in outer space on the Space Shuttle Challenger. A special Companydeveloped space can was used.

In March 1923, "Coca-Cola" was sold in a 6-bottle carton for the first time in New Orleans, Louisiana. The cover page of the May 15, 1950 issue of Time Magazine features a "Coca-Cola" advertisement. It was the first time that a consumer product was featured on the cover of Time Magazine. The issue also contained a detailed story about Coca-Cola's extensive distribution and franchising system.

The brand name "Coke" was used for the first time in magazine advertising in June 1941. The name first appeared on bottles on December 10, 1941. Starting in 1942, the "Sprite Boy" was used to promote this new name. The brand name "Diet Coke" was first introduced in 1982, and is the world's most popular brand of diet soft drink.

July 12, 1944 first-billionth gallon of Coca-Cola syrup manufactured. April 9, 1953 second-billionth gallon of Coca-Cola syrup manufactured. May 1959 third-billionth gallon of Coca-Cola syrup manufactured. June 6, 1963 fourth-billionth gallon of Coca-Cola syrup manufactured. Mid-1966 fifth-billionth gallon of Coca-Cola syrup manufactured. January 1969 sixth-billionth gallon of Coca-Cola syrup manufactured.

17

January 1971 seventh-billionth gallon of Coca-Cola syrup manufactured. The billion gallon marks then came so frequently the Company ceased to record and celebrate them after the seventh. General Dwight D. Eisenhower sent a telegram requesting 10 "CocaCola" bottling plants for the troops overseas on June 29, 1943. At the beginning of the war, Robert W. Woodruff, president of The Coca-Cola Company, issued an order to "see to it that every man in uniform gets a bottle of Coca-Cola for five cents wherever he is and whatever it costs the Company." At the outbreak of WWII, "Coca-Cola" was bottled in 44 countries. At the close of the war, 64 additional bottling plants had been shipped abroad to be as close as possible to combat areas in Europe and the Pacific. The presence of "Coca-Cola" did more than lift the morale of the troops. In many areas, it gave local people in those countries their first taste of "Coke" and paved the way for unprecedented worldwide growth for "Coca-Cola" after the war. More than five billion bottles of "Coca-Cola" were consumed by military personnel during World War II. When WWII began, The Coca-Cola Company's use of sugar in the manufacturing of syrup for civilian consumption was restricted to 50% of its prewar average due to rationing. The rationing ended in August, 1947.

2.5 Hindustan Coca Cola Beverages Limited

2.5.1 Overview of HCCBL

The Coca-Cola Company reintroduced Coca-Cola in India on October 23, 1993, after an absence of 16 years.

18

Presently the Chief Executive Officer (CEO) of HCCBL is Mr. Sanjeev Gupta.

Brands
Coca-Cola, diet Coke, Sprite, Fanta, Schweppes, Thums Up, Limca, Maaza, Citra, Gold Spot, Kinley water, Sunfill concentrate, Shock, RIMZIM Plupy Orange. Among the above Citra, Gold Spot and RIMZIM have been phased out from the market.

Bottling Information
The Coca-Cola Company received approval from the government in July 1996 to set up a holding company to invest US$700 million in downstream operating subsidiaries to engage in the preparation, packaging, sale and distribution of beverages. In July 1997, the holding company was permitted by the government to operationalize its bottling subsidiaries. The bottling subsidiary currently owns and operates 26 bottling plants and 60 distribution centres across India. In addition, it uses 20 contract packers to augment its production capacity and cater to the increasing demand for its wide portfolio of beverages. To reach India's 400 million soft-drink consumers, the company distributes its products in over 800,000 retail outlets, serviced via trucks, converted three-wheelers, tricycles and pushcarts.

Employment / Economic Impact

The Coca-Cola system in India directly employs over 9,000 workers. For every direct job in the system, 9 indirect jobs are created in the supply chain.

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Over the past nine years, The Coca-Cola Company has invested US$827 million in India, US$805 million of which has been invested in its bottling subsidiary.

Community Involvement
The Coca-Cola Company in India supports 8 Jagriti (Awakening) Learning Centres (JLC), managed by India's well-known organizations, such as CRY, Pratham, Prayas and Literacy India. The program provides education at the primary level to underprivileged children, as well as computers and training for teachers. Over 1,800 students per year have benefit from the program. Working with state and district governments, their company provides support to primary health centres in areas where their bottlers are located. In 2002, in partnership with The St. John's Ambulance Brigade (Associate of Red Cross), they conducted health camps for those who live in povertystricken urban areas to sensitize the community on pertinent issues such as HIV/AIDS, communicable diseases, immunization, hygiene and sanitation, and reproductive and child health. Free health check-ups and medicine were provided, with over 10,000 people benefiting from the campaign. The company supports a rainwater harvesting project as part of a major government initiative to combat water scarcity and reduce ground water tables across the country. They are analyzing options for rainwater harvesting at their major bottling plants. Along with the Resident Welfare Association of Greater Kailash, the company installed four harvesters. The Chief harvesting units in a dedication to local residents. rainwater Minister of Delhi unveiled one of the rainwater

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Several of their bottling plants provide safe drinking water to local villagers through the organization of water tankers, bore wells and hand pumps. The company has funded India's first national polio eradication drive, as well as a national drought relief program.

Sponsorships
The company sponsors a unique national radio program for women called "The HER Show" (Health Education and Recreation). The 30-minute weekly program informs and educates housewives on primary health and education issues. They sponsored a one-day "Mother & Child Health district Mela" in Ghaziabad. Several hundred women and children from five villages received free medical check-ups and consultation.

2.5.2 Coca Cola products in India

Presently the brands available under Coca Cola in India are the following

Coca Cola (Coke)

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Thums Up

Fanta

Sprite

Limca

22

Maaza

Diet Coke

Sunfill

Kinley 2.6 HCCBL Operations in Bangalore

Bangalore is the South Regional Office overlooking operation all over South India. They have an office located at Ulsoor, where few of the most important people of HCCBL work. Project guide appointed was Mr. Manish Chaturvedi, Senior Manager, Key Accounts overlooking all the key accounts of HCCBL held all over India. HCCBL has 3 depots in Bangalore which cater to the city and its adjoining areas.

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Depot appointed was Bangalore North Depot located at Hebbal, the smallest of the three. The respective Area Sales Manager overlooking the operations of this depot is Mr. Vinay Nair.

Findings
3.1 Business Familiarization Process
During the process of Route Riding and studying the distribution network, various observations had to be made. These had to be done under the Business Familiarization Process which included understanding the business to the operational, logistical and financial level.

The various brands and the SKUs stocked are:

Coca Cola 200ml, 300ml, 600ml, 1000ml, 1500ml, 2000ml bottles. Fanta 200ml, 300ml, 600ml, 1000ml, 1500ml, 2000ml bottles. Sprite 200ml, 300ml, 600ml, 1500ml, 2000ml bottles. Thums Up 200ml, 300ml, 600ml, 1000ml, 1500ml, 2000ml bottles. Limca 300ml, 600ml 2000ml bottles. Plupy Orange 200ml, 500ml, 1000ml bottles. Coca Cola 330ml cans Maaza 250ml 500ml, 1000ml bottles. Fanta 330ml cans. Sprite 330ml cans. Thums Up 330ml cans. Diet Coca Cola 330ml cans. Maaza 200ml tetra packs.

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Kinley Soda 500ml, 1000ml bottles. Kinley Water 250ml, 500ml, 1000ml, 2000ml, 25litre bottles. Refills for the fountain machines for Coca Cola, Fanta, Sprite, and Thums Up.

The following observations were made during the course of the Route Riding exercise
There are 79 trucks with a mix of company owned and hired vehicles. Everyday, on an average of three times a day, a big truck with a capacity of 650 crates arrives at the dept with fresh stock manufactured at the Bididi Factory located on Mysore Road. Every truck had a load sheet based on which the trucks are loaded, the quantities based on past demands on those specific routes. The load variety depends on the specific route for which it is prepared. The load sheet contains details of crates going out, crates coming in, breakages, empties returning, etc. Payments are collected from the retailers on a cash basis; however, the salesmen provide credit at their own risk for a period ranging from half a day to two days. The distributors frequently enquire about the various schemes available. Coolers are sometimes purchased by the retailers, and sometimes coolers are provided by the company. The various outlets which are served include bakeries, bars, restaurants, corner stores, provision stores, college canteens, pan walahs, etc. Most trucks return around the lunch time or evening for reloading and go out for redistribution till midnight. Most routes have two trucks, where the small hired truck is used to gain a competitive advantage over Pepsi, as it is faster and can access shops with greater speed because it can enter smaller lanes and shortcuts.

25

The agency has been given the contract for supplying pet bottles in five routes, and has not undertaken the responsibility in full capacity.

The company owned vehicles deliver to the bigger shops first before Pepsi reaches them so as to maximize sales. Cost and commission structure o Hired salesmen get Rs.3.50 per crate sold + Rs.2000 basic + load repayment for helpers. o Company salesmen get Rs.9.75 per crate sold but no load repayment. o Rs.20 bottles distributed at Rs.18.75 o Rs.10 bottles distributed at Rs.8.75 o Rs.6 bottled distributed at Rs.5.33

Discount vehicles are there for special discount outlets, where deliveries are made at a discount of Rs.40. The empty bottles are collected, sorted into their respective varieties, and sent back to the factory. There they are given an hour long acid treatment followed by a soap wash, after which without physical handling, they are automatically sent for refilling.

A bottle costs about Rs.5 and on an average it is expected that a bottle will last 8 refills without damage or breakage.

In addition to the above, the following general observations were made across the 5 routes travelled
Even the smallest dealer/shop wanted the company to provide them with facilities like cooler, stand etc. Those who had a cooler wanted bigger ones. All the flavours were not being supplied regularly. In fact, during the days of route riding most of the retailers complained of irregular supply from Coca Cola.

26

Pepsi products were being bought those days in higher quantities because of low supply from Coca Cola. Coke has been in maximum demand amongst all flavours of the company. Other flavours on an average have more or less similar demand patterns. The service provided by Coca Cola was an issue of concern for many retailers. For example: cooler complaints were not handled properly and cooler repair etc. took a long time. Most of the dealers have mentioned that Pepsi was much faster in handling such complaints. Many retailers did not encourage the price war between Coca Cola and Pepsi. Packs: The demand of different packs varied in different areas. The 200ml bottles were in very high demand in smaller areas and shops but at the same time the supply was very less. In posh areas people were not so much bothered about a little difference in money if they got 100ml extra, but in smaller localities people/children would even come with Rs.6 change only to get the 200ml bottle. Even a rupee mattered to them.

Visibility
The overall visibility/market share of Coca Cola in the areas visited was roughly around 60% as compared to Pepsi products. This was based on visible amount of stock kept of Coke as compared to Pepsi products, placement/visibility of Coke products in the shop/outlet. The Coca Cola stands were misused (Coke stand abuse) to the extent of 15%. Some stands were even left empty or half full. The coke coolers were misused to a higher degree. Cooler abuse was around 30-35%. Most of the retailers who did not have Pepsi coolers used Coke coolers for both Coke & Pepsi products. Some also used the Coke coolers for other general items in their shop (curd, milk etc.). A particular shop owner out rightly refused the Coke salesman that he would keep only Coke in the Coke cooler. Some (very few) retail outlets/shops (not restaurants) were adamantly selling Coke products over the MRP in spite of the customer demanding the MRP.

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3.2

Canteen Stores Department (CSD) 3.2.1 Overview

Canteen Stores Department or CSD forms the single largest contract for Coca Cola India. There are 3000 CSD stores spread all over India across 32 cities. The data was collected for 301 CSD stores spread over 26 cities. These 26 cities are as follows Agra Ahmedabad Bangalore Bareilly B.D. Bari Bhatinda Bikaner Bombay Area Chennai Cochin Delhi Dimapur Hissar Jabalpur Jaipur Kolkata Khadki Lucknow Meerut Misamari 28

Narangi Pathankot Ramgarh Secunderabad Udhampur Vishakapatnam

Coca Cola has entered into an agreement with the CSD stores to supply stocks at subsidised rates. Therefore Coca Cola has an advantage in terms of the mileage that is gained by the selling of drinks at these stores.

3.2.2 Objective
To analyse the data provided by the company and find out the CSDs where the market share of Coke was higher, the CSDs where the market share of Pepsi was higher and the CSDs where the market shares were equal.

This data was to be presented to project guide based on which

Strategies would be formulated so as to maintain the market share at those CSDs where market shares are higher; Strategies would be formulated to increase market share at those CSDs where market shares are lower or equal to that of Pepsi.

3.2.3 Data analysis

The market shares were calculated for each of the cities based on the data provided by the company. The market shares were calculated by using

29

simple percentages. The cities where market shares are higher have been coded in Pink, the cities where market shares are equal have been coded in orange, and the cities where market shares are lower have been coded in red. The data available was for the months of March and April 2007. Therefore the positions over the two months have been represented separately and then a comparative analysis has been shown where the situation has improved, and where the situation has deteriorated. The position as of March 2007 was Agra Ahmedabad Bangalore Bareilly B.D. Bari Bhatinda Bikaner Bombay Area Chennai Cochin Delhi Dimapur Hissar Agra Ahmedabad Bangalore Bareilly B.D. Bari Jabalpur Jaipur Kolkata Khadki Misamari Narangi Pathankot Jabalpur Jaipur Kolkata

Khadki Secunderabad Lucknow Udhampur Meerut Vishakapatnam

The position as of April 2007 was Lucknow

Meerut Misamari Narangi Pathankot Ramgarh Secunderabad Udhampur Vishakapatnam 30

Bhatinda Bikaner Bombay Area Chennai Cochin Delhi Dimapur Hissar

The changes that have taken place in terms of improvements are Bangalore Bangalore
Delhi Khadki Pathankot Udhampur Bikanerv Bombay Area Chennai

Delhi Khadki Pathankot

The changes that have taken place in terms of detriment are

B.D. Bari Meerut The position of Coca Cola in the two months can be represented as follows
Market Leader Equal Share Lagging behind competitor

35%

March 2007

46%

19%

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Graph : Market share analysis, March 2007

April 2007

19%

54% 27%

Graph : Market share analysis, April 2007 3.3 Foodworld 3.3.1 Overview
Foodworld is a joint venture between RPG Group of India and Dairy Farm International (DFI) of Hong Kong.

It started with one outlet in Chennai in 1996. It is the largest supermarket chain in India and only one with presence in South and West India.

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Picture : Foodworld store in Chennai

Partnership Arrangement between Foodworld and Coca Cola was supposed to give Coke 100% in chilled and 80% share in warm beverage section, and exclusive rights to promotions.

3.3.2 Objective
To gather data from company sources on the invoices of purchase and the billing details for the months of March, April, and May 2007 and to correlate with the receipts in order to ascertain the weighted average payment period for the stores in the cities of Bangalore, Chennai and Hyderabad. Also to analyze the growth in terms of total volume and volume per outlet and the effectiveness of the combination campaigns those are run with other products.

3.3.3 Data analysis

The data for the 26 Foodworld stores in Chennai, 25 Foodworld stores in Bangalore, and the 18 Foodworld stores in Hyderabad were provided by the distribution agency. The data that was provided included the dates on

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which invoices were made, i.e. deliveries of stocks were made, and also included the dates on which cheques were received and corresponding to which invoices. The data that was received was also classified into RGB (glass bottles) and PET (plastic bottles). The data was provided for the months of March, April and May 2007. Based on such classification, the following points are to be noted which are crucial in understanding how the analysis has been made The carry forward system has been used to take care of opening balances and carry forward the closing balances which are still to be paid. It is assumed that payments have been made on a First In First Out system, i.e. earliest invoices being cleared first. The differences in dates have been calculated and then the weighted average collection periods have been ascertained for the 3 cities. The weights that have been associated with the days of delay in payment have been taken as the amount of payment itself. The following chart shows the various calculated figures that have been calculated by taking into account the secondary data provided by the company and then applying the weighted average method to find out the weighted average collection period.

City / Particulars Invoice amount Amount received Weighted average collection period

Chennai
Rs. 72,16,365 Rs. 35,57,407 61.96 days

Bangalore
Rs. 34,70,994 Rs. 9,50,181 54.67 days

Hyderabad
Rs. 24,47,795 Rs. 19,07,165 50.91 days

Table : Analysis of Foodworld data

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Additional analysis was done on the data provided. The findings of those analysis is given below

Graph : All India Volume performance

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Graph : Year To Date (YTD) City Wise Volumes The following graphs relate to the growth that has been exhibited over the last two years.

Graph : Volume per store in Chennai for PET

Graph : Volume per store in Chennai for Mobile and Cans 36

Graph : Volume per store in Bangalore for PET

Graph : Volume per store in Bangalore for Mobile and Cans

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Graph : Volume per store in Hyderabad for PET

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Graph : Volume per store in Hyderabad for Mobile and Cans

Conclusion and Recommendations

The various conclusions that can be made with regards to the various phases of the project are as follows

Phase 1 Riding on the affordability strategy kickstarted by Coca-Cola India,

the number of active consumers in carbonated soft drinks in India has nearly doubled in the past year from 160 million to 300 million. This has cemented the companys confidence that the way forward in a market like India is not just to garner more market share but to expand the market itself.

The five-rupee strategy has worked very well for us in India. And the first round
of making the soft drink affordable to a mass audience will be followed by fresh investments in strengthening the distribution network, building fresh bottling lines

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to meet peak capacity and adding cooling capacity said The Coca-Cola

Company East and South Asia Group president Patrick Stewart.

While the company will have nearly a million Coca-Cola outlets across India in 2006, it is recommended that 100,000 to 200,000 new outlets be added every year. The country already has a total of 9 million consumer outlets and a large number of these can be Coca-Cola outlets. The affordable strategy, which has made the 200ml bottle of Coke at Rs. 6 the greatest value for money for the carbonated drink consumers anywhere in the world, has also enabled the company to manage the seasonality of the business. Therefore, it is recommended that new outlets be added every year and provide more value for money following the popular 200ml strategy. Such a scheme may also be launched for the PET category, an example of which is the 100ml extra making 600ml PET bottles a standard for PET bottle purchasers.

Phase 2 There has been significant improvement in the market share position
of Coca Cola in the Canteen Store Department (CSD) stores. This is a result of the intensive aggressive marketing that the company has done with regards to its key accounts. CSD is the single largest key account that Coca Cola has in India, and therefore this account has been greatly stressed upon over the last couple of months.As is evident from the analysis, there are CSDs where Coca Cola has the greater share, there are CSDs where the share is equal and there are CSDs where Coca Cola lags behind in terms of share of turnover. Therefore it is recommended that separate strategies be formulated for these different situations. For CSDs where Coca Cola is leading, a proper strategy be formulated by which this lead can be maintained and strengthened. This can be through increased value-additions and more timely deliveries and maintenance of more buffer stocks. For CSDs where the share is equal and lagging behind Pepsi, more aggressive marketing is required like that has

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been done in the other CSDs where there has been significant improvement in position. The successes at other CSDs have to be replicated at these stores to gain a greater share in these CSDs.

Phase 3 The problem that has been found out in the Foodworld account has
been the delay in the collection of the bill amounts. Foodworld claims to clear all dues within a maximum period of 30 days, and in the worst cases clear all the dues within a period of 45 days. But according to the analysis that has been made, the earliest period of clearing of dues has been found to be 52 days. There is, at any point of time, a huge amount of funds blocked in the account. This has been the persisting problem for a long period of time. The reason why this happens is that the billing amounts are usually very small and there are an innumerable number of invoices. Due to the complication arising as a result of this system followed, it gets increasingly difficult to match the invoice billings with the amounts received. Therefore it is a tedious task to find out the exact delays in the payments. Therefore it is recommended that the process be simplified and further stock deliveries are made only against payment clearances of the invoices exceeding the period of 45 days. Under no circumstances should there be any outstanding payments exceeding the period of 45 days.

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Bibliography
All the information that has been presented in the project report has been collected from various sources. Many books, journals and websites have been referred to for the purpose of collecting information as well as preparation of the project report.

Books
1. C.R. Kothari, Research methodology, Wishwa Prakashan, 2002

Journals
1. HT correspondent, Coke to beef up distribution network, Hindustan Times, Friday 04-July-2003

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Web sites
1. Coca-Cola Worldwide http://www.cocacola.com/index.html 2. Indian FMCG market overview

http://www.financialexpress.com/fe/daily/20000619/ffe13083.html
3. World of Coca Cola, Atlanta

http://www.mapatlanta.com/wocc/wocc1.htm
4. Coca Cola India Overview

http://www2.coca-cola.com/cfs/include/india.html
5. Coca Cola History http://www2.netdoor.com/~davidroy/coke.html 6. Google- www.google.com/images.html

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