[SALES & DISTRIBUTION]

[Assignment]

Supply Chain & Marketing Strategy Analysis Of

Coca-Cola.

Supply Chain & Marketing Strategy Of Pizza Hut.

PRESENTED BY:
Arohi Sharma
Sohail Parvez
Minal Asnani
Psreay Singh
 Supply Chain Analysis Of COCA-COLA:
 History:
Founded in 1892, the Coca-Cola Company, American company, today mainly involved
in the production and sale of syrup and focus for Coca-Cola, a sweetened carbonated
beverage that is a United States cultural institution and a global symbol of American
tastes. Other soft drinks and citrus beverages are also produced and sold by the business.
Coca-Cola is the world's biggest beverage manufacturer and distributor and one of the
biggest corporations in the United States, with more than 2,800 products available in
more than 200 nations. Headquarters are in Atlanta, Georgia.
 The drink Coca-Cola was originated in 1886 by an Atlanta pharmacist, John S.
Pemberton (1831–88), at his Pemberton Chemical Company.
 Frank Robinson chose the name for the drink and penned it in the flowing script
that became the Coca-Cola trademark.
 Supply Chain Graphic:
Coca-Cola has one of the largest supply chain systems in the world. The Coca-Cola
Company is a beverage retailer, producer and marketer of concentrate and syrups of
non-alcoholic beverage. Coca-Cola presently provides over 500 products in more than
200 nations or regions, serving 1.6 billion daily servings. 1] The company is best known
for its Coca-Cola flagship product.
The beverage industry's generic supply chain graphic is usually the same as any other
industry with their respective roles being played by producers, distributors, retailers and
end customers. In the process diagrams, we will further explore the customized and
somewhat complicated supply chain model of Coca-Cola.
 SUPPLY CHAIN MANAGEMENT:
We will limit the scope of this project to the company's most significant brand, its
flagship brand Coca-Cola, due to the vast nature of the company's activities and its
several product lines spread all over the world. This chapter provides a short overview
of the supply chain of the company.
The Coca-Cola Company follows a unique supply chain management scheme where
only syrup concentrate is produced by the business, which is then marketed to distinct
bottlers worldwide holding an exclusive territory. The Coca-Cola Company owns its
Coca-Cola Refreshments anchor bottler in North America. The company's supply
chain is divided into various levels. This study will focus primarily on the product's
downstream activities that involve alliances with various bottlers, distributors and
channels used to reach various retailers.
 Upstream Activities: Upstream operations are limited to focus manufacturing
only. The real formula used by Coca-Cola to produce the syrup is a very tight
trade secret, so there is little data about the exact components and therefore
little data about the expenses of their supplies. The main formula copy is kept
in the primary vault of SunTrust Bank in Atlanta.
 Downstream Activities: The downstream activities of The Coca-Cola
Company focus on the franchised distribution model where The Coca-Cola
Company produces only concentrate of syrup, which is then sold to multiple
bottlers worldwide holding exclusive land. In relation to owning its anchor
 bottler in North America (Coca-Cola Refreshments), it has minority stocks in
some of its biggest franchises, such as Coca-Cola Enterprises, Coca-Cola
Amatil, Coca-Cola Hellenic Bottling Company (CCHBC) and Coca-Cola
FEMSA, but it produces nearly half of the quantity sold worldwide.
Coca-Cola Company follows an extensive distribution scheme due to the
commoditized nature of its products by working with local bottlers working in
various nations and regions. Most of these bottlers have exclusive distribution
rights to their predefined regional fields. The Coca-Cola Company lays out the
fundamental operational procedures rules, customer relationship management
and query management and these bottlers have some degree of freedom to
develop other SOPs relating to delivery, fleet management and developing
credit lines.
To simplify the entire Supply Chain Management of the Coca-Cola Company,
let’s review a small channel flow process which will help us in developing a
better understanding of how Coca-Cola Company’s supply chain works.
 Distribution: The drinks (in the form of cans or bottles) are transported from
the manufacturing plant to distribution and sales facilities using the own
commercial vehicle fleet of the bottlers.
It is the responsibility of the distribution centres to store and manage the
inventory of various SKUs and to dispatch them off to the market to various
retailers. The distribution and sales centres have multiple predefined zones and
sub divisions of areas to capture all the retailers and contact points in the
market. Generally, this distribution and sales centres have the following
departments.
 Sales and Dispatch.
 Customer Service and Query Management.
 Logistics Dept. or Fleet Management.
 Storage or Warehousing.
 IT Dept.
  Marketing Strategy of Coca-Cola:
Coca Cola is world’s leading soft drink maker and operates in more than 200 countries
around the world. It sells a variety of sparkling and still beverages. It generates 60% of its
revenue and about 80% of its operating profit from outside the United States. It has strong
brand recognition across the globe. According to business insider, approximately 94% of the
world population is aware of the red & white logo of Coca Cola.

Coca Cola has competitive edge over its competitors in terms of operations, Cost control,
Brand portfolio, channel marketing, Collaborative customer relationship.

 Operations – Coca cola has outsourced the bottling operation to the

franchisee, FEMSA which is the largest Bottling franchisee of the Coca-Cola
trademark beverages in the world. It helps the company in capturing
important growth opportunities in under-developed non-carbonated beverage
segment and in strategic acquisitions by entering into agreements to jointly
acquire companies with The Coca Cola Company.
 Cost control – Its diversified product portfolio, Outsourcing operations
& economies of scale helps it in cutting its operational cost & increase
its profitability.
 Strong Brand Portfolio – Company offers a powerful and wide portfolio of
beverages to its customers, and continuously explores promising beverage
categories to capture growth in its different markets. Its beverage portfolio
consist of carbonated soft drinks, bottled water, juices, orangeades, iso-tonics,
teas, energy drinks, milk, coffee and even beer in some markets such as Brazil.
 Collaborative customer relationship – Coca Cola strongly believes in
participative marketing creating shared values for all stakeholders. Tailoring
its extensive portfolio of products and packages for their stores based on the
local market’s socioeconomic demographics, relevant consumption occasion
and the store’s distinctive characteristics.

 BCG Matrix in the Marketing strategy of Coca Cola:

Coca Cola’s trademark brand occupies a different position in BCG matrix based on
the demand & competitive position.
Thumps-up, Sprite, Fanta & Mazza are Stars as these brands have high market share but high
competition in their respective segment.
Kinley is question mark reason being low sales. Company is not able to distinctly position
Kinley due to the presence of lots of local players in the highly commoditized market resulting
in low sales.
The main brand Coca Cola is considered a cash cow because it has a single competitor
in Pepsi and has a fantastic presence across the world
Coke-diet, Tea & coffee brands are dogs since it’s not able to attract customers for this segment
and these are probably more long-term units and under establishment.
 Distribution strategy in the Marketing strategy of Coca Cola:
1. The pre-sale system, which separates the sales and delivery functions,
permitting trucks to be loaded with the mix of products that retailers have
previously ordered, thereby increasing both sales and distribution efficiency.
2. The conventional truck route system, in which the person in charge of the
delivery makes immediate sales from inventory available on the truck.
3. A hybrid distribution system, where the same truck carries product available for
immediate sale and product previously ordered through the pre-sale system.
4. The telemarketing system, which could be combined with pre-sales visits.
5. Sales through third-party wholesalers of the products.

 Pricing Strategy – Today, it became quite popular for start-ups, for a day or two, to
offer their service or a product for free, and then increase their prices. Though, Coca-
Cola chose a different approach and made the challenge even tougher. From 1886 to
1959 (73 years), Coca-Cola had a fixed price and it only cost 5 cents.
Today, due to the fierce competition with Pepsi (their rivalry dates back to 1975),
Coca-Cola pricing strategy is strictly updated because if the prices between them
noticeably change, then one of the brands will definitely suffer, and the other one will
surely benefit. For instance, if the price of Cola-Cola will too much exceed Pepsi’s,
then consumers may shift to the cheaper one. On the other hand, if the prices will
drop, it might make customers doubt the quality of the product it sells.

 The Classic Bottle of Coca-Cola – Coca-Cola’s bottle was a part of the corporation’s
defensive marketing. But, after time, they started promoting it as much as the logo and
product. Furthermore, Coca-Cola’s bottle design was inspired by the shape of the cocoa
pod.

 Coca-Cola Logo/Font – In 1923, when the corporation’s logo was normalized, Coca-
Cola decided that as the recipe, the logo must have remained untouched. As a result,
Coca-Cola’s logo has been messing with the minds of the society for a very long time.

 Social Media – Considering that social media has become the greatest tool for
marketing, of course, Coca-Cola has taken the advantage and created its social profiles
on reputable media like Facebook, Google+, Twitter, Pinterest. And let’s see how they
manage each of them.

1. Facebook – The strategy that Coca-Cola uses is quite unusual and unique, it’s
something similar to Starbucks. Considering, that Coca-Cola is the most
recognized brand, it’s easy for them to attract dozens of fans without even
trying. But still, engaging and interacting with consumers is still something that
must be done. For instance, apart from Red Bull and ASOS, Coca-Cola isn’t
that active on Facebook, they may go even a week without any updates. But
post engagement is still unbelievably good. Moreover, since Coca-Cola doesn’t
own any stores to drive customers, their aim is to increase awareness for future
ads, expand brand recognition and increase authority.
2. Twitter – Coca-Cola is one of the most active brands on twitter I’ve seen. The
company has 3M+ followers and more than 129K tweets. The way Coca-Cola
uses Twitter is quite unique. They spend a lot of their time replying @mentions.
So, as Nike, social media is a vital part of the Coca-Cola marketing strategy.

3. Pinterest – The way, that Coca-Cola uses Pinterest is quite entertaining. Rather,
than focusing on marketing messages, Coca-Cola simply gathers images that
are somehow related to the Coke, itself. For example, many of the images
uploaded on Coca-Cola’s Pinterest account are random images from Flickr, that
weren’t taken for the sake of advertising, but for entertainment and joy. In
addition, it’s an awesome idea that Coca-Cola came up with, because this way,
they can encourage people to interact with the brand more often and inspire the
society to take their chance and get featured on the brand’s official social
profile.

4. Google+ – The Google+ Page of Coca-Cola isn’t that impressive. They do have
about 2M followers, but they are less active, compared to Facebook and Twitter.
Furthermore, the fans are also less engaged, than on other social media. The
only interest that Google+ drives, is the hangouts hosted with Coca-Cola’s
awesome fans.
  Supply Chain of Pizza Hut:
Pizza Hut was founded in 1958 by brothers Dan and Frank Carney in their hometown of
Wichita, Kansas. When a friend suggested opening a pizza parlour—then a rarity—they agreed
that the idea could prove successful, and they borrowed $600 from their mother to start a
business with partner John Bender.

Like many of its multinational competitors, Pizza Hut uses a highly-franchised model that helps
maximize profit margins. However, Pizza Hut also owns Pizza Hut's Supply Chain Services
(SCS), a subsidiary that supplies dough, ingredients, equipment and services to the stores
owned by the company and the franchises. This model allows Pizza Hut to uphold quality
standards and maintain consistency across franchised units, but it also provides the company
with a significant revenue stream. Supply chain of pizza hut starts from the suppliers of pizza
hut. There are direct suppliers and indirect suppliers of Pizza hut. Direct suppliers of Pizza hut
are three named as:

 Pepsi Company
 Bake parlour company (Buns)
 Habib oil Mills (First mineral water) And all other material like Cutlery, meat,
vegetables, sauces, and all other material come from their warehouse named as
“Commissary”.
That material is purchased by Commissary means indirect suppliers of Pizza hut are:
 Meat market (Their owns cattle)
 Vegetable market
 Sauce company
 PURCHASING OF PIZZA HUT:
Pizza Hut demands the direct material on daily basis. On every day end pizza hut
manager forecasts the demand of next day and gives the order to the suppliers than
next day morning the goods come to the Pizza hut. All indirect material i.e.
vegetables, sauces, meat, cutlery and all material are purchased by the ware house
named by “Commissary”. The material comes from warehouse by the trucks on every
Wednesday. Then Pizza hut takes the orders from its customers who come to pizza
hut and take the orders from the delivery service there is a specialized system in pizza
hut which is connected to the delivery orders service so that 1 order list at a time
come in the kitchen and at the manager’s table also. Than production of pizza
according to order starts and they deliver it within 45 minutes at the door of customer
and in pizza hut they just take 20 minutes to prepare the pizza and serve it to the
customer.

 LOGISTICS OF PIZZA HUT:

 Distribution channels:
The type of distribution channel used by Pizza Hut is the direct channel. The
direct channel is successful when there is an extremely large market that is
geographically dispersed. The direct channel is also useful when there are many
buyers, but a small amount purchased by each. Pizza Hut uses three different
methods of selling its products directly to the market.
 1. The first method of distribution used by Pizza Hut is delivery. Customers
can call Pizza Hut ahead of time, place an order, and the order is delivered
to the customer’s home.
2. Another method of distribution is for customers to dine-in. Customers can
go to the nearest Pizza Hut, place an order and either leave with the order
or eat at the restaurant
3. The third method of distribution is online ordering. Customers can now go
on the Internet and place an order.

 OPERATIONS OF PIZZA HUT:

Operations/production management of Pizza Hut Operation process started. From
8am to 11am pizza hut gets open for the production function only. From 11am till 3 at
night, customers are welcomed to come in and enjoy their meal. Operation/production
includes the preparation of pizza dough according to the estimated demand. All the
processes include machines and labour both. Each dough is not prepared by a single
person, but each person is assigned to complete a single task in order to improve
efficiency. Till 11am, all the dough gets prepared and rest of the pizza preparation
process I-e, filling, topping and baking, is done after receiving orders from customers.
After the order placement of customers, preparation of pizza get started, the
preparation time of pizza or the serving time of customer’s order is max 16 minutes.
Whether there are too many customer’s orders and takeaways, but the pizza hut’s
serving time never exceeds up to 16 minutes. Their ready dough helps them to make
the entire customers satisfy in time. Incise of unexpected large number of customers
or too many take away and delivery orders, the work is done in a way that one person
spreads sauce, other add veggies, other one fills meat and the other person spreads
cheese on it and then finally pizza goes in oven. This chain helps to serve customers
as quickly as possible. But in normal routine only one person is responsible to prepare
a single order (filling, topping etc).
In pizza hut, here is no inventory left at end. All the pizzas are prepared as per
customer’s demand. But sometimes, incise of any food festival or food stalls at
exhibitions, there may some error occur to estimate the demand of unexpected arrivals
of customer. If expected demand is high as compare to actual demand, then finished
goods inventory may left. At the end the cost must be paid by company. To cut this
cost pizza hut has a straight policy that this ending inventory (remaining pizzas)
neither distributed among employees/workers nor stored in refrigerators to resell the
next day but directly through into dustbin. The aim is to demotivate workers for
producing extra units, keep them not to think that remaining pizzas would be serve to
them or they may takeaway to their homes. The other reasons are to estimate demand
more carefully and not to compromise on quality.
 JIT STRATEGY OF PIZZA HUT:
Pizza hut works on JIT they order direct supplies according to demand. For
just in time strategy they prepare themselves few hours before
 All team members are prepared before peak hours with vegetables required
for toppings. They keep things ready in the line. Keep lemonade syrup ready
so that they just must add 7 up when the customer asks for Lemonade.
 They be ready with different patties (pizza base)
 During peak hour they provide the pizza making time of 15 – 20 minutes.
While there cycle of making one pizza is only 7 minutes. In normal case they
provide the pizza making time of 10 – 14 minutes. This they do, so that the
 customers have food as early as possible and their table gets vacant early so
that more and more customers are served.

 Marketing strategy of Pizza Hut :

Stronghold in the Pizza market with its large number of menu items and their varieties is
helping the company in being competitively ahead of its competitors.

Developing markets are the markets which will be driving the business growth in the future
and Pizza Hut’s main strength is its focus on generating business and drive growth from the
emerging markets.

Stable and strong Parent company: Yum Brands which is the parent company of the Pizza
Hut and have KFC and Teco Bell brand in its brand portfolio, is helping Pizza Hut in
exploiting the resources and its networks for the growth of the business.

 Distribution strategy in the Marketing strategy of Pizza Hut : Pizza Hut is the
world’s largest casual dining restaurant chain with more than 13, 000+ restaurants
across 100 countries. In India, alone Pizza Hut has more than 140 dining
restaurants with sitting and take away facilities across 38 cities.
 Brand valuation in the Marketing strategy of Pizza Hut –The casual dining
experience of Pizza Hut is recognised by Brand Equity who awarded it ‘Most
Trusted Food Brand’ for continuously 6 years in a row. Attracting
50,000 people per day across the country in a country like India, Pizza Hut has
become the perfect place to celebrate.

 Competitive analysis in the Marketing strategy of Pizza Hut –Domestic

& international companies like Dominos, Papa Jones, Toppers, Greco etc., eating
up each other’s market share. Pizza industry is overcrowded with but Pizza Hut
with their online discount offers, offerings and on time delivery is able to maintain
its leadership position in most of the countries it operates into.
 Market analysis in the Marketing strategy of Pizza Hut –Due to the presence of
various fast food options, it is difficult for the Pizza companies to increase
the customer base whereas at the same time increase its market share. In developing
nations, it is tough for the companies like Pizza Hut to increase the market size due
to several factors like Low per capita income, poverty level, literacy level &
standard of living.

Pizza Hut stores are strategically located to cater the needs of the large areas of nearby localities
so as to keep the infrastructure cost low. Also promoting online sales channel through offering
discounts is helping the company to

1. Increase the customer satisfaction level by offering convenience.

2. Cost control
 Customer analysis in the Marketing strategy of Pizza Hut –A customer of Pizza Hut
varies geographically across the world. In developed nations like US, UK etc.
consumers are of all age groups whereas in developing nations like India majority of
customers are younger generations in the age group of 20-40 years.