CONTENTS

Sl. No. Topic

1) CERTIFICATE

2) DECLARATION

3) ACKNOWLEDGEMENT

4) CHAPTER – I

o Introduction
o Scope of project
o Objective of project

6) CHAPTER – III
o Research Methodology

7) CHAPTER – IV
o Marketing survey & Data Analysis
o Testing of Hypothesis

8) CHAPTER – IV
o Recommendations
o Suggestion

9)CONCLUSION

11) BIBLIOGRAPHY

10) QUESTIONAIRE

1
 Declaration

I “Deepak Verma” declare that this project

report entitled “Each Dealer Survey and
Relationship Management with retailers In
Lucknow and is and of f
original piece of work done and submitted by me
towards partial fulfillment of my Post Graduate
Diploma in Management , under the guidance of
“Mukesh Gupta(C.E)and Vikas Tondon(A.D.C)”
Pepsico India Ltd.

Date: Place:
Signature:

2
 Acknowledgement

I take this opportunity to express my deep

sense of gratitude to my superiors “Mukesh
Gupta(C.E)and Vikas Tondon(A.D.C)” for their
guidance and other staff of the organization
for extending their valuable support and
help in the preparation of this project report.
I am also thankful to my family, friends and
Nanda Cold Drinks (Agency PepsiCo) for
extending their co-operation in completion
of this project report.

Date:

Place: Signature

3
 INTRODUCTION

The FMCG sector represents consumer goods required for daily or

frequent use. The main segments of this sector are personal care (oral
care, hair care, soaps, cosmetics, toiletries), household care (fabric wash
and household cleaners), branded and packaged food, beverages (health
beverages, soft drinks, staples, cereals, dairy products, chocolates, bakery
products) and tobacco.
The Indian FMCG sector is an important contributor to the country's GDP.
It is the fourth largest sector in the economy and is responsible for 5% of
the total factory employment in India. The industry also creates
employment for 3 m people in downstream activities, much of which is
disbursed in small towns and rural India. This industry has witnessed
strong growth in the past decade. This has been due to liberalization,
urbanization, increase in the disposable incomes and altered lifestyle.
Furthermore, the boom has also been fuelled by the reduction in excise
duties, de-reservation from the small-scale sector and the concerted
efforts of personal care companies to attract the burgeoning affluent
segment in the middle-class through product and packaging innovations.

Unlike the perception that the FMCG sector is a producer of luxury items
targeted at the elite, in reality, the sector meets the every day needs of
the masses. The lower-middle income group accounts for over 60% of the
sector's sales. Rural markets account for 56% of the total domestic FMCG
demand.

Many of the global FMCG majors have been present in the country for

4
many decades. But in the last ten years, many of the smaller rung Indian
FMCG companies have gained in scale. As a result, the unorganized and
regional players have witnessed erosion in market share.

History of FMCG in India

In India, companies like ITC, HLL, Colgate, Cadbury and Nestle have
been a dominant force in the FMCG sector well supported by relatively
less competition and high entry barriers (import duty was high). These
companies were, therefore, able to charge a premium for their products.
In this context, the margins were also on the higher side. With the gradual
opening up of the economy over the last decade, FMCG companies have
been forced to fight for a market share. In the process, margins have been
compromised, more so in the last six years (FMCG sector witnessed
decline in demand).

Current Scenario
The growth potential for FMCG companies looks promising over the
long-term horizon, as the per-capita consumption of almost all products in
the country is amongst the lowest in the world. As per the Consumer
Survey by KSA-Technopak, of the total consumption expenditure, almost
40% and 8% was accounted by groceries and personal care products
respectively. Rapid urbanization, increased literacy and rising per capita
income are the key growth drivers for the sector. Around 45% of the
population in India is below 20 years of age and the proportion of the
young population is expected to increase in the next five years. Aspiration
levels in this age group have been fuelled by greater media exposure,
unleashing a latent demand with more money and a new mindset. In this
backdrop, industry estimates suggest that the industry could triple in
value by 2015 (by some estimates, the industry could double in size by
2010).
In our view, testing times for the FMCG sector are over and driving rural
penetration will be the key going forward. Due to infrastructure
constraints (this influences the cost-effectiveness of the supply chain),

5
companies were unable to grow faster. Although companies like HLL and
ITC have dedicated initiatives targeted at the rural market, these are still
at a relatively nascent stage.
The bottlenecks of the conventional distribution system are likely to be
removed once organized retailing gains in scale. Currently, organized
retailing accounts for just 3% of total retail sales and is likely to touch
10% over the next 3-5 years. In our view, organized retailing results in
discounted prices, forced-buying by offering many choices and also opens
up new avenues for growth for the FMCG sector. Given the aggressive
expansion plans of players like Pantaloon, Trent, Shopper’s Stop and
Shoprite, we are confident that the FMCG sector has a bright future.

Budget Measures to Promote

FMCG Sector
 2% education cess corporation tax, excise duties and custom duties
 Concessional rate of 5% custom duty on tea and coffee plantation
machinery

Budget Impact
The education cess will add marginally to the tax burden of all FMCG
companies
The dividend distribution tax on debt funds is likely to adversely effect
the other income components of companies like Britannia, Nestle and
HLL
The measure to abolish excise duty on dairy machinery is a positive for
companies like Nestle
Concessional rate for tea and coffee plantation machinery is a positive
for Tata Tea, HLL, Tata Coffee and other such companies
Duty reduction in food grade hexane will have a marginally positive
impact on companies like Marico and HLL
Area specific excise exemptions for North East, J&K, Himachal Pradesh
will continue to encourage FMCG companies to relocate to these areas.

Budget over the

years

Budget 2001-02 Budget 2002-03 Budget 2003-04

6
 • From 35-55% to • Increased focus • Excise on
75% for crude on agricultural biscuits reduced
edible oil reforms with an to 8% from 16%.
• From 45-65% to aim to integrate Excise on soft
85% for refined the countrywide drinks and sugar
edible oil food market boiled
• From 35% to • Deregulation of confectionery
70% for copra, the milk also reduced
coconut, tea and processing • All states to
coffee capacity switch to VAT in
• From 25% to • Excise duty FY04 (deadline
55% for crude structure largely now has been
palm oil untouched. Only extended till end
• Development for tea, the duty FY05)
allowance of tea was reduced • Loans to
industry raised from Rs 2 per Kg agriculture and
to 40% from to Re 1 to small-scale
20% • Customs duty on sector will now
• All food tea and coffee be available at
preparations doubled to 100% maximu 2%
based on fruits • Duty on above prime
and vegetables imported pulses lending rate
(pickles, sauces, upped to 80% (PLR)
ketchup, juices, • Development
jams etc.) made • Import duty on plans for roads,
completely wine and liquor ports, railways
exempt from slashed from and airports
excise duty 210% to 180%
• Customs duty on
• Excise on alcoholic
cosmetics and beverages
toiletries halved reduced
to 16%
India offers a large and growing market of 1 billion people of which 300
million are middle class consumers. India offers a vibrant market of youth
and vigor with 54% of population below the age of 25 years. These young
people work harder, earn more, spend more and demand more from the
market, making India a dynamic and aspirational society. Domestic
demand is expected to double over the ten-year period from 1998 to
2007. The number of households with "high income" is expected to
increase by 60% in the next four years to 44 million households.

India is rated as the fifth most attractive emerging retail market. It

has been ranked second in a Global Retail Development Index of 30

7
developing countries drawn up by A T Kearney. A.T. Kearney has
estimated India's total retail market at $202.6 billion, is expected to grow
at a compounded 30 per cent over the next five years. The share of
modern retail is likely to grow from its current 2 per cent to 15-20 percent
over the next decade, analysts feel.

The Indian FMCG sector is the fourth largest sector in the economy
with a total market size in excess of US$ 13.1 billion. The FMCG market is
set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015.
Penetration level as well as per capita consumption in most product
categories like jams, toothpaste, skin care, hair wash etc in India is low
indicating the untapped market potential. Burgeoning Indian population,
particularly the middle class and the rural segments, presents an
opportunity to makers of branded products to convert consumers to
branded products.

India is one of the world’s largest producers for a number of FMCG

products but its FMCG exports are languishing at around Rs 1,000 crore
only. There is significant potential for increasing exports but there are
certain factors inhibiting this. Small-scale sector reservations limit ability
to invest in technology and quality up gradation to achieve economies of
scale. Moreover, lower volume of higher value added products reduce
scope for export to developing countries.
The FMCG sector has traditionally grown at a very fast rate and has
generally out performed the rest of the industry. Over the last one year,
however the rate of growth has slowed down and the sector has recorded
sales growth of just five per cent in the last four quarters.
The outlook in the short term does not appear to be very positive for
the sector. Rural demand is on the decline and the Centre for Monitoring
Indian Economy (CMIE) has already downscaled its projection for
agriculture growth in the current fiscal. Poor monsoon in some states, too,
is unlikely to help matters. Moreover, the general slowdown in the
economy is also likely to have an adverse impact on disposable income

8
and purchasing power as a whole. The growth of imports constitutes
another problem area and while so far imports in this sector have been
confined to the premium segment, FMCG companies estimate they have
already cornered a four to six per cent market share. The high burden of
local taxes is another reason attributed for the slowdown in the industry
At the same time, the long term outlook for revenue growth is positive.
Give the large market and the requirement for continuous repurchase of
these product

 Type Public (NYSE: PEP)

 Founded 1965
 Headquarters New York, USA
 Key people Indra Nooyi,
Chairwoman, President & CEO
 Industry Food and beverage
 Products:
 Pepsi
 Tropicana Products
 Gatorade
 Lay's
 Doritos
 Frappuccino (for Starbucks)
 Mountain Dew
 Operating income$6.44 billion USD (2006)
 Net income $5.64 billion USD (2006)
profit margin 16.06%
 Employees 153,000(2005)
 GROUP OF COMPANIES

9
  Frito-Lay North America
 PepsiCo Beverages North America,
 PepsiCo International
 Quaker Foods North America

Mission

10
The main objective of the company is to provide best quality
products to its consumer. Another objective is to provide
healthy rewards to its investor, good reward to its employee
and other investor and partners who financially help the
company

Vision

11
The vision of the company is to improve in all aspects in which
they operate. By improving in social and economical
environment, they want to make tomorrow better than today.

A Brief Pepsi History

In 1893, Caleb Bradham,a young pharmacist from New Bern, North

Carolina, begins experimenting with many different soft
drink concoctions. Like many pharmacists at the turn of
the century he had a soda fountain in his drugstore, where
he served his customers refreshing drinks, that he created
himself. His most popular beverage was something he
called "Brad's drink" made of carbonated water, sugar,
vanilla, rare oils, pepsin and cola nuts.

One of Caleb's formulations, known as "Brad's drink", created in the

summer of 1893, was later renamed Pepsi Cola after the pepsin and cola
nuts used in the recipe. In 1898, Caleb Bradham wisely bought the trade
name "Pep Cola" for $100 from a competitor from Newark, New Jersey
that had gone broke. The new name was trademarked on June 16th, 1903.
Bradham's neighbor, an artist designed the first Pepsi logo and ninety-
seven shares of stock for Bradham's new
company were issued.

1898 - One of Caleb's formulations, known

as "Brad's Drink," a combination of
carbonated water, sugar, vanilla, rare oils

12
and cola nuts, is renamed "Pepsi-Cola" on August 28, 1898. Pepsi-Cola
receives its first logo.

1905 - Pepsi-Cola's first bottling franchises are established in Charlotte

and Durham, North Carolina. Pepsi receives its new logo, its first change
since 1898.

1906 - Pepsi gets another logo change, the third in eight years. The
modified script logo is created with the slogan, "The Original Pure Food
Drink."

1908 - Pepsi-Cola becomes one of the first companies to

modernize delivery from horse drawn carts to motor
vehicles. Two hundred fifty bottlers in 24 states are under contract to
make and sell Pepsi-Cola.

1910 - The first Pepsi-Cola bottlers' convention

is held in New Bern, North Carolina.

1920 - Pepsi theme line speaks to the consumer

with "Drink Pepsi-Cola, it will satisfy you."

1928 - After five continuous losing years, Megargel reorganizes his

company as the National Pepsi-Cola Company, becoming the fourth
parent company to own the Pepsi trademark.

1934 - A landmark year for Pepsi-Cola. The drink is a hit and to attract
even more sales, the company begins selling its 12-ounce drink for five
cents (the same cost as six ounces of competitive colas). The 12-ounce
bottle debuts in Baltimore, where it is an instant success. The cost savings
proves irresistible to Depression-worn Americans and sales skyrocket
nationally.

13
Caleb Bradham, the founder of Pepsi-Cola and "Brad's Drink," dies at 66
(May 27th,
1867-February 19th, 1934).

1935 - Guth moves the entire Pepsi-Cola operation to Long Island City,
New York, and sets up national territorial boundaries for the Pepsi bottler
franchise system.

1936 - Pepsi grants 94 new U.S. franchises and year-end profits reach
$2,100,000.

In 1940, the Pepsi Cola company made history when the first advertising
jingle was broadcast nationally on the radio. The jingle was "Nickel Nickel"
an advertisement for Pepsi Cola that referred to the price of Pepsi and the
quantity for that price "Nickel Nickel" became a hit record and was
recorded into fifty-five languages.

1941 - The New York Stock

Exchange trades Pepsi's stock for
the first time. In support of the
war effort, Pepsi's bottle crown
colors change to red, white, and
blue.

1942 - One on many company

sponsored efforts to allow
soldiers to communicate with
friends or family. This record was
made in New York City but often
booths would be set up with mobile recording equipment that was bought
to where the soldiers were. Shell material on solid core. 78 rpm.
1943 - Pepsi's theme line becomes "Bigger Drink, Better Taste."

14
1948 - Corporate headquarters moves from Long Island City, New York, to
midtown Manhattan.

1950 - Alfred N. Steele becomes President and CEO of Pepsi-Cola. Mr.

Steele's wife, Hollywood movie star Joan Crawford, is instrumental in
promoting the company's product line.

Pepsi receives its new logo, which incorporates the "bottle cap"
look. The new logo is the fifth in Pepsi history.

1953 - "The Light Refreshment" campaign capitalizes on a change in the

product's formula that reduces caloric content.

1955 - Herbert Barnet is named President of Pepsi-Cola.

1959 - Pepsi debuts at the Moscow Fair. Soviet Premier Khrushchev and
U.S. Vice President Nixon share a Pepsi.

1960 - Young adults become the target consumers and Pepsi's advertising
keeps pace with "Now it's Pepsi, for those who think young."

1962 - Pepsi receives its new logo, the sixth in Pepsi history. The
'serrated' bottle cap logo debuts, accompanying the brand's
groundbreaking "Pepsi Generation" ad campaign.

1963 - After climbing the Pepsi ladder from fountain syrup salesman,
Donald M. Kendall is named CEO of Pepsi-Cola Company. Pepsi-Cola
continues to lead the soft drink industry in packaging innovations, when
the 12-ounce bottle gives way to the 16-ounce size. Twelve-ounce Pepsi
cans are first introduced to the military to transport soft drinks all over the
world.

15
1964 - Diet Pepsi, introduced as America's first national
diet soft drink. Pepsi-Cola acquires Mountain Dew from
the Tip Corporation.

1965 - Expansion outside the soft drink industry begins.

Frito-Lay of Dallas, Texas, and Pepsi-Cola merge, forming PepsiCo, Inc.

Military 12-ounce cans are such a success that full-scale commercial

distribution begins.

Mountain Dew launches its first campaign, "Yahoo

Mountain Dew...It'll tickle your innards."

1970 - Pepsi leads the way into metrics by

introducing the industry's first two-liter bottles.
Pepsi is also the first company to respond to
consumer preference with light-weight, recyclable,
plastic bottles. Vic Bonomo is named President of
Pepsi-Cola. The Pepsi World Headquarters moves
from Manhattan to Purchase, NY.

1974 - First Pepsi plant opens in the U.S.S.R. Television ads introduce the
new theme line, "Hello, Sunshine, Hello Mountain Dew."

1976 - Pepsi becomes the single largest soft drink brand sold in American
supermarkets. The campaign is "Have a Pepsi Day!" and a classic
commercial, "Puppies," becomes one of America's best-loved ads. As
people get back to basics, Pepsi is there as one of the simple things in life.

1977 - At 37, marketing genius John Sculley is named President of Pepsi-

Cola.

1978 - The company experiments with new flavors. Twelve-pack cans are
introduced.

16
1980 - Pepsi becomes number one in sales in the take home market.

1981 - PepsiCo and China reach agreement to manufacture soft drinks,

with production beginning next year.

1982 - Pepsi Free, a caffeine-free cola, is introduced nationwide. Pepsi

Challenge activity has penetrated 75% of the U.S. market.

1984 - Pepsi advertising takes a dramatic turn as Pepsi becomes "the

choice of a New Generation." Lemon Lime Slice, the first major soft drink
with real fruit juice, is introduced, creating a new soft drink category,
"juice added." In subsequent line of extensions, Mandarin Orange Slice
goes on to become the number one orange soft drink in the U.S. Diet
Pepsi is reformulated with NutraSweet (aspertame) brand sweetener.

1985 - After responding to years of decline, Coke loses to Pepsi in

preference tests by reformulating. However, the new formula is met with
widespread consumer rejection, forcing there-introduction of the original
formulation as "Coca-Cola Classic." The cola war takes "one giant sip for
mankind," when a Pepsi "space can" is successfully tested aboard the
space shuttle. By the end of 1985, the New Generation campaign earns
more than 58 major advertising and film-related awards. Pepsi's campaign
featuring Lional Richie is the most remembered in the country, according
to consumer preference polls..

1987 - Pepsi-Cola President Roger Enrico is named President/CEO of

PepsiCo Worldwide Beverages. Pepsi-Cola World Headquarters moves
from Purchase to Somers, New York. After a 27 year absence, Pepsi
returns to Broadway with the lighting of a spectacular new neon sign in
Times Square.
1988 - Craig Weatherup is appointed President/CEO of Pepsi-Cola
Company.

17
1989 - Pepsi lunges into the next decade by declaring Pepsi lovers "A
Generation Ahead." Chris Sinclair is named President of Pepsi-Cola
International. Pepsi-Cola introduces an exciting new flavor, Wild Cherry
Pepsi.

1990 - American Music Award and Grammy winner rap artist Young MC
writes and performs songs exclusively for national radio ads for Pepsi. Ray
Charles joins the Pepsi family by endorsing Diet Pepsi. The slogan is "You
Got The Right One Baby."

1991 - Craig E. Weatherup is named CEO of Pepsi-Cola North America, as

Canada becomes part of the company's North American operations. Pepsi
introduces the first beverage bottles containing recycled polyethylene
terephthalate (or PET) into the marketplace. The development marks the
first time recycled plastic is used in direct contact with food in packaging.

1992--Pepsi-Cola launches the "Gotta Have It" theme which supplants the
longstanding "Choice of a New Generation."

1993 - Brand Pepsi introduces its slogan, "Be Young. Have Fun. Drink
Pepsi." Pepsi-Cola profits surpass $1 billion. Pepsi introduces an
innovative 24-can multipack that satisfies growing consumer demand for
convenient large-size soft drink packaging. "The Cube" is easier to carry
than the traditional 24-pack and it fits in the refrigerator.

1994 - New advertising introducing Diet Pepsi's freshness dating initiative

features Pepsi CEO Craig Weatherup explaining the relationship between
freshness and superior taste to consumers. Pepsi Foods International and
Pepsi-Cola International merge, creating the PepsiCo Foods and Beverages
Company.

18
1995 - In a new campaign, the company declares "Nothing else is a Pepsi"
and takes top honors in the year's national advertising championship.

1996 - In February of this year, Pepsi makes history once again, by

launching one of the most ambitious entertainment sites on the World
Wide Web. Pepsi World eventually surpasses all expectations, and
becomes one of the most landed, and copied, sites in this new media,
firmly establishing Pepsi's presence on the Internet.

1997 - In the early part of the year, Pepsi pushes into a new era with the
unveiling of the GeneratioNext campaign. GeneratioNext is about
everything that is young and fresh; a celebration of the creative spirit. It is
about the kind of attitude that challenges the norm with new ideas, at
every step of the way.

PepsiCo. announces that, effective October 6th, it will spin off its
restaurant division to form Tricon Global Restaurants, Inc. Including Pizza
Hut, Taco Bell, & KFC, it will be the largest restaurant company in the
world in units and second-largest in sales.

1998 - Pepsi celebrates its 100th anniversary. PepsiCo. Chairman and

CEO Roger A. Enrico donates his salary to provide
scholarships for children of PepsiCo employees. Pepsi
introduces PepsiOne - the first one calorie drink without that
diet taste!

2000 - Although Pepsi is a great place to work, Steven Truitt (aka 'struitt')
takes his skills and hard work elsewhere (for more money of course!),
therefore putting an end to his Pepsi page! For more information about
Pepsi, choose a search engine and search for 'Pepsi' or visit
www.pepsi.com or www.pepsico.com.

19
2005 - Pepsi invited to introduce new brand cola

PEPSICO IN INDIA

PepsiCo gained entry to India in 1988 by creating a joint venture with the
Punjab government-owned Punjab Agro Industrial Corporation (PAIC) and
Voltas India Limited. This joint venture marketed and sold Lehar Pepsi
until 1991, when the use of foreign brands was allowed; PepsiCo bought
out its partners and ended the joint venture in 1994. Others claim that
firstly Pepsi was banned from import in India, in 1970, for having refused
to release the list of its ingredients and in 1993, the ban was lifted, with
Pepsi arriving on the market shortly afterwards. These controversies are a
reminder of "India's sometimes acrimonious relationship with huge
multinational companies." Indeed, some argue that PepsiCo and The
Coca-Cola Company have "been major targets in part because they are
well-known foreign companies that draw plenty of attention."

In 2003, the Centre for Science and Environment (CSE), a non-

governmental organization in New Delhi, said aerated waters produced by
soft drinks manufacturers in India, including multinational giants PepsiCo
and The Coca-Cola Company, contained toxins, including lindane, DDT,
malathion and chlorpyrifos — pesticides that can contribute to cancer, a
breakdown of the immune system and cause birth defects. Tested
products included Coke, Pepsi, 7 Up, Mirinda, Fanta, Thums Up, Limca,
and Sprite. CSE found that the Indian-produced Pepsi's soft drink products
had 36 times the level of pesticide residues permitted under European
Union regulations; Coca Cola's 30 times. CSE said it had tested the same
products in the US and found no such residues. However, this was the
European standard for water, not for other drinks. No law bans the
presence of pesticides in drinks in India.
The Coca-Cola Company and PepsiCo angrily denied allegations that their
products manufactured in India contained toxin levels far above the norms

20
permitted in the developed world. But an Indian parliamentary committee,
in 2004, backed up CSE's findings and a government-appointed
committee, is now trying to develop the world's first pesticides standards
for soft drinks. Coke and PepsiCo opposed the move, arguing that lab
tests aren't reliable enough to detect minute traces of pesticides in
complex drinks. On December 7, 2004, India's Supreme Court ruled that
both PepsiCo and competitor.
The Coca-Cola Company must label all cans and bottles of the respective
soft drinks with a consumer warning after tests showed unacceptable
levels of residual pesticides.[citation needed]

Both companies continue to maintain that their products meet all

international safety standards without yet implementing the Supreme
Court ruling.[citation needed] As of 2005, The Coca-Cola Company and
PepsiCo together hold 95% market share of soft-drink sales in India.
PepsiCo has also been alleged[attribution needed] to practice "water
piracy" due to its role in exploitation of ground water resources resulting
in scarcity of drinking water for the natives of Puthussery panchayat in the
Palakkad district in Kerala, India. Local residents have been pressuring the
government to close down the PepsiCo unit in the village.

In 2006, the CSE again found that soda drinks, including both Pepsi and
Coca-Cola, had high levels of pesticides in their drinks. Both PepsiCo and
The Coca-Cola Company maintain that their drinks are safe for
consumption and have published newspaper advertisements that say
pesticide levels in their products are less than those in other foods such as
tea, fruit and dairy products. In the Indian state of Kerala, sale and
production of Pepsi-Cola, along with other soft drinks, has been banned.
Five other Indian states have announced partial bans on the drinks in
schools, colleges and hospitals.
3.1 Highlights of PepsiCo in India:

 World leader - Convenient Foods and Beverages

21
  Revenues of more than $35 billion
 More than 1,68,000 employees
 Available in nearly 200 countries and territories
 Group’s 37 bottling plants in India
 16 are company owned and 21 are franchisee owned
 Tropicana was acquired in 1998 and PepsiCo merged with The
Quaker Oats Company in 2001
 Generates direct employment for more than 4000 people in India
and indirect employment for 60,000 people

• Set up 8 greenfield sites in backward regions of different states.

PepsiCo intends to expand its operations and is planning an
investment of approximately US$ 150 million in the next two-three
years.

 Annual exports from India are worth over U.S$60 million

 PepsiCo Founded in 1965 through the merger of Pepsi-Cola and
Frito-Lay
 PepsiCo entered India in 1989

THE MARKETING MIX-4 P’S WITH SPECIAL

REFERENCE TO PEPSI:

22
Product:
A business needs to consider the products that it
produces and the stage of the product life cycle that a product is at.
Marketing strategies will vary according to the type of product and its
stage in the life cycle.

In case of Pepsi, in the rural markets, the 300ml bottle

and now days the new small or commonly known as the “chota pepsi” is
very much popular. The Pepsi Co. is even thinking of introducing their new
Pepsi-Aha, but presently they are concentrating more on the normal pepsi
as the rural market is a niche market. Pepsi is even successful in
introducing the big 1-1.5 liter PET bottles in the rural markets. These big
bottles are very popular during big festivals and marriages.

Price:

23
 Most businesses use a "cost plus" method for setting
the prices of their products. This involves determining unit production
costs and then adding in a profit margin. However, many other factors are
involved. Consider "perceived price" (what you think consumers will be
prepared to pay), demand elasticity (is it elastic or inelastic?),
competitors' pricing (can you afford to undercut their prices?), pricing
objectives (what do you want to achieve Ð increased market share?
increased profits? market leadership? etc.)

Example 2 Perfume

‫מ‬ How much does it cost to make?

‫מ‬ Can businesses afford a "price war"?

‫מ‬ Why is Coca Cola so successful?

As far as the pricing goes, the 300 ml Pepsi bottle is

priced at Rs. 10. But the company soon realized that this pricing worked in
the urban markets but not in the rural markets as in the rural markets,
Pepsi is not a necessity but a luxury. They found out that people in the
rural markets bought cold drinks only if there was some occasion. A price
point of Rs 10 for a 300 ml bottle has proved a major deterrent: it has
kept away new consumers in the urban and semi-urban pockets, and it
has blanked out the far larger rural markets where annual per capita
consumption is less than a bottle. So the Rs. 10 bottle was not that
successful. But their sales increased after introducing the “chota Pepsi”.
This 200ml Pepsi was reasonably priced between Rs.5- Rs.7. This was a
major weapon for the expansion of the rural market. Pepsi expects the
small-size offering to account for 30 per cent of volumes this year
compared with 18 per cent last year. But there are other areas of concern
— principally that the 200 ml offering should not cannibalize 300 ml sales.
In that case, there will be no market growth. That is why pricing could be
crucial. Pepsi, for instance, has reckoned that giving consumers 33 per
cent (100 ml) less cola at 50 per cent of the price (Rs 5) is not a
sustainable option and can, at best, be used as an introductory offer. The
conclusion is based on hard facts. Last year, the beverage giants test-
marketed 200 ml bottles at a price of Rs 5. Instead of growth, Pepsi
discovered that 300 ml drinkers merely shifted to the 200 ml variant, the
market remained stagnant and everyone lost money. The conclusion was
clear: cutting prices does not necessarily expand the market.

24
Place
This generally refers to the physical locations of
product sales as well as the methods of distribution. However, it is also
considered to be the "place" or "position" in the market of the product;
refer to information below. Businesses need to make many decisions
related to "place": access, parking, competition, physical location etc.

It’s the most important P in the cola wars — Place. And

nothing evokes more passion in Pepsi and Coke than distribution. Major
innovation is underway on the distribution front at Pepsi, pre-selling being
the biggest of all. It’s been successfully test marketed in Bangalore,
Baroda and Coimbatore — and may soon roll out nationally.

In case of the distribution network, there is no

involvement of wholesalers in the distribution of products. It is more like
an agent network. The companies have divided the country into various
regions and established a franchisee in each region. The franchisees have
their own bottling plants and manage all the day-to-day operations.
However, of late, the soft drinks companies have started setting up
company owned bottling units have been acquiring some of its franchise
bottles.

In the current system, the strike rate in the Delhi

market is about 40 per cent, which can be improved to 80 per cent in the
peak season, claims a franchise director. The result for Pepsi could be
significant

savings. “Colas service just 7.5-8 lakh accounts compared to the other
FMCG players who service three times the number. Innovation in our
distribution system will take us closer to the 21 lakh figure,” says Vats, a
franchise director.

Pepsi believes in direct distribution whereas Coke

doesn’t. It mainly concentrates on dealers and most importantly cutting
costs. “There are plenty of innovations possible in distribution that can cut
costs”, says a Pepsi official.

For Pepsi, the rural market is a chosen thrust this year. It

has targeted to reach 20 to 28 per cent of the rural population in the first
year of this operation. In the first stage, the corporation is planning a
massive roll out in villages with populations of 5000. To do this effectively,
Pepsi is focusing on establishing a cold chain.

25
 The company has developed special freezers that allow
its products to stay chilled despite power cuts of three to four hours. It will
also use traditional iceboxes to sell its product in rural India. For the rural
markets, Pepsi is looking at the wholesale route since the logistics of
direct distribution are too huge to handle in the interiors.

Promotion
This refers to the promotion of the product to the
target market. This is achieved through a combination of: advertising: use
of electronic and print media. The "reach" (how many people will see the
advert), frequency (how many times will I advertise the product?) and
impact of the advertising must also be evaluated.

Personal selling: what happens in the "shop", contact between sales

people and consumers or customers.

Sales promotion: use of gimmicks and incentives e.g. competitions.

Sponsorship and promotional licensing: including specific products sold
under license that promotes the business (e.g. football jumpers).
Publicity or public relations: "adversarial" in local papers or special
promotional materials.

Due to the cola wars promotion, and advertising has

always been an integral part for both the cola cos: Pepsi and Coke. But for
the first time perhaps in the history of cola wars, the strategies of the two
giant cos are diverging in India. Whether it’s business or product
strategies or the critical distribution game plan, the archrivals are taking
roads that do not meet. Mr. Bakshi of Pepsi Co. is bringing a change in
their distribution and marketing strategies. Now days where Coke is
concentrating more on the 200ml bottle, Mr. Bakshi of Pepsi says “The
200ml bottle gets zero demand in the rural market.” He is concentrating
on the 1.0 liter bottles of Pepsi. The Pepsi Co. had used an excellent
marketing strategy here. During the Lagaan mania they were distributing
free tickets in the rural markets along with their 1.5-liter PET bottles. Pepsi
made this 1.5-liter PET bottle very famous for their special festive
occasions and marriage.

Well the popularity of the product has also increased

due to their advertisements or basically famous cricket and bollywood
personalities endorsing this product. For instance the Sachin “Aala re
Aala” advertisement where even he is wearing a mask along with those
rural kids. Or you can even take the new Sachin and Amitabh Bachchan
advertisement where both of them say “ Yeh Dil Maange More!!!!!!!”
Sachin has done many advertisements for Pepsi in the span of 10 years.

26
 Pepsi’s rural market advertisement- Pepsi has unveiled
a major campaign in Andhra Pradesh, roping in top Telugu film star,
Pawan Kalyan, even as the star's elder brother, Chiranjeevi, is into
pushing Coca-Cola's Thums Up. Pawan Kalyan, however, ruled out any
rivalry between him and his brother. Though he will sing Yeh Dil Maange
more, his brother will say Yeh Dil Maange no more. “We have our lives
and we have our own choices,” he said on the possible in-house cola feud

Pepsi also kicked off a rural campaign, spread over

two months. Decorated Pepsi vans will roll out into market of the State.
Every consumer drinking a Pepsi from these vans will get to play a game
and win prizes. These include Pawan Kalyan memorabilia, T-shirts,
autographed posters and calendars.

Explaining the reason for choosing Pawan Kalyan to endorse Pepsi, Mr.
Rohit Ohri, Director HTA, Pepsi's ad agency, said Pepsi and Pawan Kalyan
were going to be an ideal combination. “Both are so youthful, energetic
and fun-loving,” he said. Mr. Vijay Shanker Subramaniam, Vice-President
(Marketing), Pepsi Foods Ltd, said the company was starting an
“aggressive campaign” in Andhra Pradesh. Apart from the van operations,
which were flagged off by Pawan Kalyan, other campaigns have been
lined up throughout the year.

Later, Pawan Kalyan presented a cheque for Rs 5 lakh to Mr. Mehmood

Ali, a mechanic with the Andhra Pradesh State Road Transport Corporation
for winning Pepsi's Mera number ayega campaign.

Lastly, we all know that though Coke ranks 1st with 57 % of the market
share (which includes Thums –up too), Pepsi ranks 2nd with 43% of the
market share. The Pepsi Co. has fought a bitter struggle upwards starting
from a zero market share. When Pepsi entered the market in 1989, they
faced the daunting task of pacifying Indian swadeshi activists alone. Their
trucks were smashed and offices ransacked so as to dissuade them from
entering the Indian market. Whereas when Coke entered (or re-entered)
the Indian market in 1993, the situation had been smoothed out by Pepsi
already, and the atmosphere was extremely conducive to foreign
multinationals coming to India. Therefore, though Coke ranks 1st, it got
this position only after introducing the Parle products who already had a
70% market share at that point of time. Presently Pepsi Co. is also
concentrating on its other products like slice, mirinda and aquafina. Their
next aim is to popularize their other products like sodas, then the new
Pepsi Aha- the apple drink and beat coke to become the new market
leader.

Highlights of Indian FMCG sector:

27
 The Indian FMCG sector - the fourth largest sector in the economy –
market size > $13.1 bn
 Strong MNC presence
 Well established distribution network
 Intense competition between the organized and unorganized
segments
 200 million people expected to shift to processed and packaged
food by 2010
 Low operational cost.
 India needs around $28 billion of investment in the food-processing
industry.

 FOOD AND BEVERAGES

 Size of the Indian food processing industry- $ 65.6 billion, including
$20.6 billion of value added products.
 The health beverage industry -$230 million
 Bread and biscuits at $1.7 billion
 Chocolates at $73 million
 Ice creams at $188 million.
 The size of the semi-processed/ready-to-eat food segment - over
$1.1 billion.
 Three largest consumed categories of packaged foods are packed
tea, biscuits and soft drinks.
 Total soft drink market is estimated at 284 million crates a year or
$1 billion.

28
4. ORGANIZATIONAL STRUCTURE

Unit Manager

Territory Development Marketing Development

Manager Manager

Assistant Sales and Development Marketing Development

Manager Coordinator

Customer Executives

Sales Trainees

29
5. PEPSICO’S DISTRIBUTION SYSTEM

PepsiCo’s Plant

Indenti
ng

Primary Distributor
Sale

Market / Secondar
Retailers y Sale

Consumer

30
6. PEPSICO’S PRODUCTS

Following are main products of Pepsi co(india) pvt limited.

 Pepsi
 Mirinda Orange
 Mirinda Lemon
 7 Up
 Mountain Dew
 Slice
 Mirinda Sorbet (Limited Edition)
 Pepsi Gold (Limited Edition)
 Pepsi Diet
 Lehar Soda
 Aquafina
 Tropicana
 Gatorade
 Lehar Namkeen
 Lays
 Kurkure
 Uncle Chips
 Cheetos

7. RETAIL CHANNEL

31
Conveni Convenience channel

ence includes different kiosks are

which is convenient to
Channel general public.

Grocery
Channel Grocery channel includes
different grocery shops .

Eatery
Channel
Eatery channel includes
different hotels, restaurants
etc.

32
 Sales Management

Recruitment Procedure
There are three main line for recruitment of the Sales trainee of the
company
 Campus Interview
 Consultant
 Employee of the Company
Campus Interviews: The company recruits students from various
institutes of professional courses like MBA. The selection procedure
includes GD & personal interviews followed by HR interviews.
Consultants: The company has tie-ups with professional consultants
which provide a high prospector base for recruitment. The low level & the
middle level employees are recruited through this procedure.
Employees of the company: Mostly the top level employees are
selected from inside the company since the company can get loyal
persons having the experience of the company’s work culture.

Training
There are mainly two types of method for giving training to their
employee
 On the Job training and
 Classroom training through lectures.

Evaluation
There is a evaluation form in which different objectives of the company
are written. At the end of the year, immediate officer just tally whether a
particular objectives of which predetermine objectives are achieved or
not.

33
Sales Quota
In company, sales quota is decided on the basis of the sales of the last
year. After considering sales of the company, they analyze the growth of
the market. On the basis of the sales and growth of the market, company
decides sales quota for the next year. On the basis of the sales quota,

target of each area is decided.

Sales territory:
Sales territory is decided on the basis of the no. of the distributor in the
particular territory. Normally distributor has to cover 40 outlets per day
per Route driver. In particular territory, routes are decided by the
company. Like Route A Route B Route C. Route Driver (RD) of the
company visits particular route twice in a week. Route Driver distributes
products as per requirements of the outlets.

LOAD INS:

 RA to return to the Warehouse after completing the days runs as per

the Route Planner.
 Requisition forms shall be updated with quantity of unsold stock and
empties brought back to Warehouse and shall be submitted to
checker.
 Checker shall independently verify the stock brought in by the RA
and record the physically verified Stock in the checkers report.
 The Load in slip needs to be signed by the RA, Checker and the
settlement clerk.
 Settlement clerk / Warehouse manager to reconcile physical stock
vis- a-vis stock as per Requisition Form.
 Checker shall update the Gate Pass section of DSS with details of
actual load ins and empties and submit to the ASDOS clerk.

34
INVENTORY CONTROL – MANAGEMENT / ACCOUNTING OF
EXPIRED STOCKS

 Warehouse Manager to ensure that expired stock is stored

separately.
 Stock supervisor to co-ordinate with Warehouse manager and
submit report of expired stock to TDM & SAM.
 Details of all expired products needs to be sent to MU control Group
as per Authority Matrix
 MU control group to forward the same to BU for approvals.
 Post approval from BU, expired stocks will be drained at warehouses
in presence of PI employee.
 Sales accounting Manager shall be the FPR for issuing instructions to
warehouses for draining of stocks.

MARKET AUDIT

Market audit is carried out through deployment of external resources/

internal resources.
Market Audit must be done for the following claims:
 Card Discounts
 Scheme Discounts
 Spoke Commission
Market Auditors to show the report to the CE and the TDM for their
comments on the market audit done and obtain their signature on the
report.

35
At the end of every month, the market auditors must provide the report of
each and every distributor audited against the plan given at the beginning
of the month to the UFM/SAM

“EACH DEALER SURVEY AND

RELATIONSHIP MANAGEMENT WITH
RETAILERS”

36
 SCOPE OF PROJECT

1. Detailed study of the noncarbonated soft drinks industry in India

2. Analysis of Pepsi’s performance against the other prevailing
noncarbonated
Soft drinks brands in the country.
3. Evaluate the performance of Agency performance and compare
with the market size in the area.
4. Find out the problems in the area related to retailers.

OBJECTIVES OF THE PROJECT

1- Survey of each dealer and retailer in the area allotted.

2- Create good relationship with Retailers.
3. Sell the products to the retailers who are not willing to buy Pepsi
product.

Research Methodology

SAMPLING
Basic sampling Term

SAMPLE AND SAMPLE SURVEY

37
 o A part of a population, or a subset from a set of units, which is
provided by some process or other, usually by deliberate selection
with the object of investigating the properties of the parent
population or set.

o Sample survey refers to the survey which is carried out using a

sampling method, i.e. in which a portion only, and not the whole
population, is surveyed.
POPULATION
o In statistical usage the term population is applied to any finite or
infinite collection of individuals.

o It has displaced the older term universe, which is derived from the
universe of discourse of logic.

o It is practically synonymous with aggregate and does not

necessarily refer to a collection of living organisms.

SAMPLING UNIT
o One of the units into which an aggregate is divided or regarded as
divided for the purposes of sampling, each unit being regarded as
individual and indivisible when the selection is made.

o The definition of unit may be made on some natural basis, or on

some arbitrary basis.

o In the case of multi-stage sampling the units are different at

different stages of sampling.

SAMPLING FRAME
o A list, map or other specification of the units, which constitute the
available information relating to the population designated for a
particular sampling scheme.

38
 o The nature of the frame exerts a considerable influence over the
structure of a sample survey.

o In multi-stage sampling it is sometimes possible to construct the

frame at higher stages during the progress of the sample survey
itself.

SAMPLING DESIGN
o A sample design is a definite plan for obtaining a sample from the
sampling frame.

o It refers to the technique or the procedure the researcher would

adopt in selecting some sampling units from which inferences about
the population is drawn.

STATISTIC AND PARAMETER

o A statistic is a characteristic of a sample.

o A parameter is a characteristic of a population.

o To obtain the estimate of a parameter from a statistic constitutes

the prime objective of sampling analysis.

METHODOLOGY:

DATA COLLECTION

1) Primary Source
· Retailers
· Whole sellers

2) Secondary Source

39
 · No Secondary Source

RESEARCH INSTRUMENTS

· Questionnaires

. FAQs (Frequently asked questions)

SAMPLING PLAN

1) Sampling Unit: Who is to be surveyed?

· Urban Retailers

2) Sample Size: How many people to be surveyed?

· All retailers in the area (of all age groups)

3) Sampling Procedure:

We have taken sample from following areas:

1) Alambagh main

2) Azad Nagar

3) R.D.S.O

4) Tedhi Pulia

5) Geetapalli

40
 Total Number of Shops In The Area - 246
Warm Stock-15543 units
Cold Stock in Refrigerator-6743 units
Total Stock- 22286 Units

Retailers’ preference (On the basis of the

stocks they have in the shop)

Pepsi 65%
Coca-cola 35%

Pepsi
35% coca-cola

65%

Sign Board on Shop

114 shops has signboards of any company

41
Pepsi 81% (75 Shops)
Coca-cola 19% (39 shops)

19%
sign board pepsi
81%
sign board coca-
cola

Refrigerator in Shop-
80 shops has refrigerator
Pepsi-73% (58shops)
Coca-cola-27% (22 Shops)

27%
Visi Pepsi
Visi Coca-Cola

73%

Warm Stock-
Pepsi-59%(9170 units)
Coca-Cola- 41%(6372 units)

42
 41% warm Stock
Pepsi
warm Stock
59% Coca-Cola

Cold Stock-
Pepsi-55% (3708 units)
Coca-Cola-45% ( 3034 units)

45% Cold Stock

Pepsi
Cold Stock
55% Coca-Cola

Through FAQs

1-The market position of the Pepsi is very strong in

area allotted to me near about 75%softdrinks sold
belongs to Pepsi.

43
2-Dew is the most selling brand in the area and at
second position is mineral water.
3-The sale varies between 25000 to 50000 rupees
daily on each route. There are three routes so total
sales varies between 75000 to 150000 daily in the
agency.
4-Retailers are not getting the benefits provided by
the company because agency is more interested in
selling to the whole sellers in bulk.
5-when there is any scheme launched by the
company agency sells all the stock to the whole
sellers for some benefit.
7-Whole sellers are selling at low price than Agency
because of the stock they bought in schemes.
8-The work force is not well compensated their salary
is very little(2500 Rs.)
9-Acceseries are provided to the big shops only and
they should be on the main road.

1. Monthly inspection should be done to find out

the problems of customers.

2. Schemes should be provided to the customers

not to the whole sellers.

44
3. Accessories should be provided on the basis of
sale.

4. Check the selling of whole sellers at lower price

than agency.

5. Agency should be more honest in providing

benefits to retailers.

6. Salary of sales force should be increased so they

may not do fraud with retailers to earn more.

1- An inspection officer should be recruited

who perform surprise inspection of the
market and find out the problems.

45
 2- Salary of the sales personals should be
increased so they may not indulge in fraud
to retailers.

3- The vehicles of the agency should be

inspected so the delivery should be
maintained.

4- The supply from the factory to the agency

should be good especially the brands like
DEW.

My Project gives me the true knowledge of customer relationship concepts &

also helped to understand the working environment of the Pepsico.
The major thing, which I found in my whole project, is as follow:

46
 The market share of Pepsico is more than Coke
 The distribution channel of both company is very bad.
 Advertising policy of Pepsi is better than Coca Cola.
 Retailers are highly dissatisfied with salesmen behavior.
 Company relation with retailers is credit based.
 There are very less effort for promoting sales.
 There are no direct communication between retailers and company.
 There are no any route incharge.
 Retailers are not aware about company scheme and product
development.
 Scheme is not distributed honestly among retailers.

47
 Bibliography

 www.google.com

 www.Pepsicoindia.com

 www.Pepsico.com

 Philip Kotler, Marketing Management, Twelfth

Edition.

 Paul E. Green, Donald S. Tull and Gerald

Albaum- Research For Marketing Decision,

 G.C. Berry , Marketing Research

Questionnaire Design

s.n visi warm stock cold stock

o Sign board Shop name Adress Ph. No. pci ccx pci ccx pci ccx

1
2

48
 3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34

49