ray C KARA CHITKARSKandhari Beverages Private Limited An Internship Report Anamika Tarafdar Mo90700007 IN PARTIAL FULFILMENT OF THE MASTERS PROGRAM IN BUSINESS CHITKARA UNIVERSITY, n.p., ino1a een LeedaPREFACE In summer the consumption of soft drinks is more duc to hot weather time leitted iehas become an essential part of market as people like it in addition to the bottles, now days: ptroduced to enhance the impact in sales. The Mater's curriculum is designed in such a way that student can getsp maximum knowled and can get practical exposure to the corporate world in minimum possible Ume. Business schools of today realize the Importance of practical knowledge ovet the theoretical Base The research report is necessary for the partial fulfillment of Master's curriculum and it the development of skills in analyzing and MMerpreting practical problems through the practical experience. which incorporates survey and comparative analysis. Tt gives the learner Cece GrediaeACKNOWLEDGEMENT Of some unknown person makes our lives easier every day. We believe its appropriate to people, we know have ditectly shaped our hives and our wor . Texpress my gratitude to the Kandhari Beverages Private Limited (KBL) and Mr. Besh Sethi, IL specially thank my trainers, Deputy General Manager Mr. Sagoo tor constantly guiding and ‘co-operating with me and guiding me throughout the three months of my intemship period, fon my thought process hie Sharma and Dr. Santhosh for imparting their wisdom Last but not oF least importance, [tke this opportunity to thank my parents cnt friends who have been with me and offered emotional strength and moral support ‘Fable of Contents Cece GrediaeAnnexure A: Overview of the Company CHAPTER AE COCA-CC 2.1; History of Coca-Cola. 4.1: IntrodCHAPTER 7: FUTURE PLAN- THE ROADMAP, Cece GrediaeAnnexure B: Summer Project Undertaken Qvestionna 9.3: Q2 ANALYSIS.Annexure C: Market Research Execution CHAPTER 15; OPEN REVIVE GROUP (ORG ACCOUNT) cesses Cece GrediaeEXECUTIVE SUMMARY Georgia, on May 8, 1886. Coca-Cola Company is the world’s leading manufacturer. marketer and distributor of non-alcoholic beverage concentrates and syrups, used to produce nea 1y 400 beverage brands. It sells beverage concentrates and syrups to bottling Georgia when he concocted caramel-colored syrup in a three-legged brass kettle in his to eeho today Wherever Coca-Cola Is enjoyed. Coca-Cola originated as a soda fountain y when & strong bottling system developed that Coca-Cola became the world-famous. left rather than reveal its formula to the Government and reduce its eau Ing for five conte # glass, Early growth was impressive, but it was y stake as required under the Foreign Regulation Act (FERA) which governed the operations of foreign n the new liberalized and deregulated environment in 1993, Coca-Cola made its re-entry Cece Grediaeanalysts, production process, their strategies to keep up with their retailers, company's approach towards the sales of SSD and most importantly this report will provide an opportunity to know the psys to create a good future plan. This report will provide detailed information about prevailing, market competi acustment in its new strategy and promotional activity. hographic needs of the retailers which in turn shows the company an avenue on and thus prepare itself to mect the market challenge by making “The project hezins with in-depth interview with the owner of retail outlets, as primary source, to extract the reality on ground level about ‘retailer's psychology” as our distributor graphs and open ended feedbacks, are represented in under the wg of gap Cece GrediaeChapter 1: INTRODUCTION 1.1: A brief Insight- The FMCG Industry In India Fast Moving Consumer Goods (FMCG), also known as Consumer Packaged Goods (CPG) are products that have a quick turnover and relatively low cost Conaumera generally put lese thought into the purchase of FMCG than they do tor other products, The Indian FMCG industry witnessed significant changes through the 19908. Many players had been facing severe prablams on account of increased competition trom emall and regional playera and trom alow growth acrasa ite various product marketing, distribution and customer service atratagies to strengthen their position in By the turn of the 20th century, the face of the Indian FMCG industry had changed significantly. With the liberalization and growth of the Indian economy, the Indian customer witnessed an increasing exposure to new domestic and foreign products through different media, such ag television and the Internet. Apart from this, number of working couples resulting in increased spending power also contributed to the Increase in the Indian consumers" personal consumption. The realization of the Preferences on account of changing lifestyles required the FMCG producing companies to formulate customer-contric stratogies. These changes had a positive Impact. leading to the rapid growth in the FMCG industry. Increased availability of retail space. rapid urbanization, and qualified manpower also boosted the growth of the organized retailing sector. Cece GrediaeThough the absolute profit made on FMCG products Is relatively small, they large. Unlike some industries, such as automobiles, computers, and airlines, FMCG does not sutfer from mass layotts every time the econemy starts to dip. A person may put off buying @ car but he will net put off having his dinner. Irrespective of global market dip, because they generally satisfy rather fundamental, as opposed to luxurious needs. The FMCG sector, which Is growing at the rate of 9% Ja the fourth largest sector in the Indian Economy and is worth Fis.93000 crores. The main contributer, making up 32% of the sector, is the South Indian region. It is predicted that in the year 2010, the FMCG sector will be worth Fis.143000 crores. The sector being one of the biggest sectors of the Indian Economy provides up to 4 million Jobe. The FMCG sector consists of the following categories: + Personal Care: Oral care, Hair care, Wash (Soaps). Cosmetics and Toiletries. Deodorants and Perfumes, Paper products (Tissues, Diapers, Sanitary Products) and Shoe care; the major playera being: Hindustan Lever Limited, Godre} Soaps, Colgate, Marico, Dabur and Procter & Gamble. + Household Care. Fabric wash (Laundry soaps and synthetic: detergents), Household cleaners (Dist/Utensil/Floor/Teilet cleaners), Air fresheners, Insecticides and Mosquito repeliants. Metal polish ana Furniture polish: the major players being: Hindustan Lever Limited, Nirma and Rickst Colman, + Branded and Packaged foods and beverages- Health beverages, Soft drinks, Staples/Gereals, Bakery products (Biscuits, Breads, Cakes), Snack vegetables, Processed meat, Branded flour, Bottled water, Branded rice, Cece GrediaeBranded sugar, Juices; the major players being; Hindustan Lover Limited, +) Spirits and Tobacce- the major players being; ITC, Godtrey, Philips and UB. 1.2: Ab { insight- The Beverage Industry in India In India, beverages form an important part of the Ives of people. It is an Products to gain more consumers and satisfy the existing consumers. ug TNen-cale! The beverage industry ie vast and there various ways af segmenting it, 20 ae te cater follows: + Alcoholic, non-alecholle and sports beverages, Cece Grediae= Natural and Synthetic beverages. = In-home consumption and out ef heme on premises consumption = Age wise segmentation Le. beverages for Kids, for adults and for senior = Segmentation based on the amount of coneumption Le. high levele of coneumption and low levele of consumption. If the behavioral patterns of consumers in India are closely noticed, it could be observed that consumers perceive beverages In two different ways |.e. beverages are a luxury and that beverages nave to be consumed occasionally. These wo leverage the beverage industry. it Ie important to address thie issue 20 a5 to encourage regular consumption ae weil ae and to make the industry more atfordable. Soft drinks recorded robust double digit off-trade value growth in 2009, which was to grow stronaly as more consumers turned to these products in the search of healthier options. Carbonates also witnessed good sales growth as the long summer A premium priced product type and therefore not considered a necessity. Importantly, more consumers refrained from spending on non-essential items in the wake of the economic downturn, over the forecast period. As consumer awareness and understanding of the variety of soft drinks Increases and as manufacturers continue to be innovative, soft drinks is expected to pertorm wall. Products on the health and wellness platform and niche categories can expect to see good sales growth in the forecast periodChapter 2: THE COCA-COLA COMPANY Headquarters: One Coca-Cola Plaza Atlanta, GA 30313 Employees: 71,000 Stock Symbol: KO Website: hitp:/www.Goca-Cola.com Coca-Cola is the worlds leading beverage company. The company is the world's leading manufacturer, marketer, and distributor of nonalcoholic beverage concentrates and syrups, used to produce nearly 400 beverage brands. The company makes and distributes sodas, waters, fruit juice, teas and coffees and energy drinks. Through the world’s largest beverage distribution system, coneumers in more than each day. Major brands include Goke, Diet Goke, Sprite, Bacardi, A&W, Minute Maid, 2.1: History of Coca-Cola pharmacist trom Atlanta Georgia in May of 1886. Jonn name Coca-Cola was actually given to John Pemberton by his bookkeeper Frank Robingon had excellent penmanship. He first scripted "Coca-Cola" into the flowing letters which has, become the famous logo we know and love today. The soft drink was first sold to the public at the soda fountain in Jacob's Pharmacy in Atlanta on May 8, 1886. About nine servings of the soft drink were gold each day. Sales for that first year added up to total of about $50. The funny thing was that it cost John Pemberton over $70 in expanses, so the first year of sales were a loss. Until 1905, the soft drink, marketed as a tonic, contained extracts of cocaine as well Cece Grediae ESERSEas the catfeine-rich kola nut. In 1887, another Atlanta pharmacist and businessman, 52,200. By the late 18908, Coca-Cola was one of America’s most popular fountain drinks: Cantor's aggressive marketing of he product takes credit for that. With Asa Candter, between 1890 and 1900. Agvertising was an important tactor in John Pemberton and Asa Gandlers success and by the turn of the century, the drink was sold across the United States and Canada. Coca-Cola began selling syrup to Independent bottling companies licensed to gall the drink. Stil today. the US soft drink induatry le organized on thie principle 2.2: Evolution of Coca-Cola Coca-Cola originated as a soda fountain beverage in 1886 selling tor tive conte a glass. Early growin was impressive, bul it was only when a strong bottling system developed that Coca-Cola became the world-famous brand it is today. 1894 A modest start for a Bold Idea In a candy store in Vicksbura, Mississippi. brisk sales of the new fountain beverage called Coca-Cola Impressed the store's owner, Joseph A. Bledenharn. He began bottling Coca-Cola to sell, using a common glass bottle called a Hutchinson. Bledennam sent a case to Aca Griggs Candler, who owned the Company. Canaier thanked him but took no action. One of his nephews already had urged that Coca- Gola be bottled, but Candler focused on fountain sales, 1899 The first bottling agreement Two young attomeys from Chattanooga, Tennesses belleved they could build @ business around bottling Coca-Cola. Ina meeting with Candler, Benjamin F. Thomas and Joseph B. Whitehead obtained exclusive rights te bottle Coca-Cola across most of the United Cece GrediaeStates (specifically excluding Vicksburg) -- for the sum of one dollar. A third Chattanooga lawyer, John T. Lupton, soon joined their venture, 1900-1909 ... Rapid growth The three pioneer boitlers divided the county Into tertllories and sold bottling rights to technology. which Improved efticiency and product quality. By 1909, nearly 400 Coca- Cola bottling plante were operating, most of them family-owned businesses. Some: Boutiors worried that the straight-sided bottle for Coca-Cola was sasily confused with imitators. A group representing the Company and bottlers asked glase manutacturers to offer ideas for a dictnctive bottle. A design from the Root Glass Company of Terre Haute, Indiana won enthusiastic [approval in 1915 and was introduced in 1916. The contour bottle became one of the few packages ever granted most recourized tore in the world ever in the darkl AAs the 19208 dawned, more than 1,000 Coca-Cola boilers were operating In the U.S. Their Ideas and zeal tsled steady growth. Gbcbotle cartons were a huge hit after thelr 1928 invoduction. A few yoare later, open-top metal cootere became the Gove-Gala exceeded fountain sales. Led by longtime Company leader Robert W. Woodruft, chet | executive officer and chairman of the Board, the Company began a malor push to establish boring operations outside the U.S. Plants wore Cece Grediaeopened in France, Guatemala, Honduras, Mexico, Belgium, Italy, Peru, Spain, bottled in 44 countries. During the war, 64 bottling plants were set up around the world MY ccuioment and materials from General Eisenhower's base in SNorth Atrica. Many of these war-time plante were later system and accelerating the growth of the Company's worldwide business. For the first time, consumers had choices of Coca-Cola package size and type — the traditional 6.5-ounce contour bottle, or larger servings including 10-, 12- ana 26-ounce available in 1960. Following Fantat in the 1950s, Sprites, Minute Maid, Fresca® and TaBe joined The 19808 brought dict Coke® and Cherry Coke®, followed by POWERADE® and DASANI® in the 1990s. Today hundreds of other brands are offered to moet consumer preferences in local markets around the world. As technology led te a global economy, the retailers who sold Coca-Cola merged and response, many small and medium-size bottlers consolidated to better serve giant International customers. The Company encouraged and invested in a number of Cece Grediaebottler consolidations to assure that its largest bottling partners would have capacity to lead the system in working with global retailers, Political and economic changes opened vast markets tat were closed or heavily to bullet plants in Eastern Europe. And as the century closed, more than $1.5 billion wae committed to new bottling facilities in Africa. The Coca-Cola bottling system grew up with roots deeply planted in local communities. This heritage servos the Company well today as people seok brands that honor local identity and the distinctiveness of local markets. As was true a century age. strong locally based relationships between Coca-Cola bottlers, customers and communities are the foundation on which the entire business grows. 2001 ... launched the new fridge pack in USA a thinner longer 12 pack desian 2005 ... innovative aluminum contour bottles introduced commonly called MS as the Gola taste launched 2006 ... Goca-Gola tume 120. Launches the “every drop count” campaign to make: the consumers remind of the variety of products Coca-Cola offers 2007 ... launches the PET bottle which uses 6% less plastic than the other PET Cece Grediae2.3: Manifesto for Growth over the next ten years and beyond, we must look ahead, understand the trends and forces that will shape our business In the future and move swiftly to prepare for what's to come. We must get ready tor tomorrow today. That's what our 2020 Vision is all about. It creates a long-term destination for our business and provides us with a "Roadmap" for winning together with our bottling partners. (Our Roadmap starts with our mission, which is enduring. It declares our purpese as a company and serves as the standard against which we weigh our actions and + To refresh the world, = To inspire moments of optimism and nappinese. 2.3.2: Our Vision (Our vision serves ae the framework for our Roadmap and guides every aspect of our business by describing what we need to accomplish in order to continue achieving sustainable. quality arowth. = People: Se a great place to work where people are inspired to be the best they + Portfolio: Bring to the world a portiolio of quality beverage brands that anticipate and satisty people's desires and noods. create mutual, enduring value, + Planet: Be a responsible citizen that makes a difference by helping build and support sustainable communities, Cece Grediae= Profit: Maximize long-term return to shareowners while being mindiul of our + Productivity: Be a highly effective, lean and fast-moving organization, 2.3.4: 01 Winning Culture make our 2020 Vision a reality. (Our values serve as a compass for our actions and describe how we behave in the = Leadersnip: the courage to shape a better ruture + Integrity: Be real ty! IF H149 to be, Ite Up to me + Diversity: As inclusive as our brands = Quatity: What we do, we de well = Fecus on needs of our consumers, customers and franchise partners + Focus on execution in the marketplace every day = Be ineatiably curious = Act with urgency. = Remain responsive to change. Cece Grediae+ Have the courage to change course when needed, = Stoward systom assets and focus on building value. = Reward our people for taking risks and finding better ways to solve problems. = Lear from our outcomes -- what worked and what didnt Inspire creativity, passion, optimiem and tun Cece GrediaeThe Coca-Cola Company offers a wide range of products to the customers including beverages, fruit juices and bottled mineral water. The Company is always looking to Innevate and come up with, either complete new procucts or new ways to bottle or pack the existing drinks. Chapter 3: COCA-COLA PRODUCTS 3.1: Brands of Coca-Cola Coca-Cola Zerom hae been one of the most successful product launch hes In Coca-Cola's history. In 2007, Coca-Cola's sold nearly 450 million cases globally. Put into perspective, that's roughly the same size ae Coca-Cola's total business in the Philippines, ene of our in more than 100 countries. Energy Drinks Energy Drinks For those with a high-intensity approach to Me, Goca-Cola'a brands of Energy Drinks contain ingredients such as ginseng extract, guarana extract, caffeine and B Juices/Juice Drinks G We bring innovation to the goodness of juice in Coca-Cola's more than 20 juice and juice drink brands, offering beth adults and chilaren Cece Grediaenutritious, refreshing and flavorful beverages. Soff Drinks dedes and innovators in the beverage industry. Sports Drinks Carbohydrates, team together in Goca-Cele’s Drinks, providing rapid hydration terrific taste for fitness-seekers at fide, and electrolytes Sporte any Tea and Coffee Bove Smooth and essential Beverages offer purest form. Water hydration In it Cece Grediae our Waters and \ provide flavor and refreshment in a variety oF choices. From the original Goca-Gola to The Coca-Cola Company are both icons: Sports Drinks Tea and Cottee convenient take-anywhere packaging. satierying both traditional tea drinkers andOther Drinks . So much more than soft drinks. Coca-Cola's brands also include milk products, soup. and more so you can choose a Coca-Cola ‘ Company product anytime. anywhere for + Inthe Orange section: Zs Cece GrediaeCece GrediaeChapter 4: KANDHARI BEVERAGES PVT. LTD. 4.1: Introduction to the Company rather than reveal its formula to the Government and reduce its equity stake as required under the Foreign Regulation Act (FERA) which governed the operations of 1999 after a gap of 16 years, with its Inunch in Agra. An agreement with the Parle Group gave the Company instant ownership of the top soft drink brands of the nation. With access to 53 of Parie's plants and a well set bottling network, an excellent base for rapid introduction of the Company's Intemational brands was formed. The Coca Cola Company acquired soft drink brands like Thumps Up, Goldspot, Limea, Maaza, which were floated by Parle, as these products had achieved a strong consumer base and formed a strong brand image In Indian market during the re-entry of Coca-Cola in 1993.Thus these products became a part of range of product of the Coca-Cola Company KANDHARI GROUP was established in 1987 by Late Mr. Teja Singh Kanchari, s presently a progressive business house in NSS inti. the aroup's first venture was a bottling unit as a franchisee of PARLE’ soft drink manufacturing = Geld Spot " under license from PARLE established at Amritsar inthe Renn indian state of Punjab andhart time, the Group ventured deep into Aerated Water business and expanded la scope of operations to other Indian states including Punjab. Haryana, Changigarn ana @ca Cte Roonomanane ets mocteaneeme PARLE brand of soft drink products, being one Cece Grediaeof the star bottlers of PARLE the Group switched to manufacturing, bottling & marketing of Coke brand of soft drink products. 4.2: Coca-Cola and Franchisee Coca-Cola is made up of 7000 local employees, SOD managers, over 60 manutacturing locations. 27 Company Owned Bottling Operations (COBO). 17 Franchisee Owned Bottling Operations (FOBO) and a nework of 29 Contract Packers: that facilitate the manutacture process of a range of products for the company. It also hae a supporting distribution network consisting of 700.000 retail cutlets ana 000 distributors. Almost all goods and services required to cater to the Indian market are made locally. with help of technology and skills within the Company Cece Grediae4.3: The Company and in addition we further aim to create value and make a difference by making our environment a cleaner and better place to live for our future generations, (Our Company vision as was established by the founder of our Group. remains to provide the people that work in the group, be it the owners or managers a great place to work where people are inspired to be the best they can be and work with quality brands and Partners to maximize profit and productivity. 4.3.2: MANAGEMENT Mr. Nirmal Singh Kandhari, Group Chairman has been a pioneer figure in Indian soft drink industry. He was instrumental in establishing Kandhari Group as a soft drink manutacturing giant with a number of battling units in Northam India. Mr. Jaspal Singh Kandhar!, Managing Director, has been steering the Group to new heights by redefining business strategy of the family business. Mr Jaspal Kanaan ie Mr. Nirmal Singh Kandhar’s younger brother. Mr.Varinder Pal Singh Kandharl, Executive Director looks after the day to day operations of the group. He ie the aon of Mr. Nirmal Singh. 4.3.3: HUMAN RESOURCE ‘The Kanghari Group has more than 3000+ employees, which include around 00 professionals with various skill set and professional competence in the various Industries they are handling. The Group has different project execution , maintenance teams for different application areas in Information Technology Industry. Cece GrediaeKandhar! Beverages Pvt. Ltd, Nabipur, Punjab and Badal, Himachal Pradesh ‘The Company is engaged in the business of Cae manufacturing, marketing and distribution of aerated water under franchise agreement with the Coca-Cola Company, USA. The Company has we mega greenfield bottling plants for filing 208 drinks located at Village Nabipur, District Fatehagarh Sahib (Punjab) and Village Katha, Badel, District Solan (HP). Present gross turnover of the company is approx Rs. 190.00 Crores. The company has algo entered the power sector by setting 4.3.5: ENRICH AGRO FOOD PRODUCTS PVT. LTD. Enrich Agro Food Producte Pvt Ltd., Gurgaon, Haryana ‘The Company is an ISO 9001; ISO 14000 ISO 22000 certified unit engaged in the. business of manufacturing & marketing of aerated water under franchise agreement with the Coca-Cola Company, USA. The most modern and fully automated bottling plant with a capacity of 1550 Bottles Per Minute is located at Gurgaon and is catering to prime areas in South Delhi and the towns of Faridabad and Gurgaon. Prosent gross turnover of the company Is approx. Rs. 100.00 Crores. 4.3.6: GROWTH RECORD From a very humble beginning in 1967, today the Group tumover aggregates strona worktorce, ‘The Group companies are fully conscious of their secio- economic responsibilities and have taken up a series of community development programs eepecially the funding & selting up of Fain harvesting projects 1o conserve the scarce natural resource |.e. water. A number of such projects have been financed by Group. Cece Grediaecompanies in Udyog Vihar, Gurgaon; DLF Gurgaon & Faridabad in Haryana as also some areas of Punjab. The foremost achievement of the Group is the strict adherence to system oriented quality production along with financial discipline, leading to consistently increasing sales graph and an unblemished track record of dealings with Fismanks. Although soft drink business still remains core activity of the Group, yet sensing increased focus on industrial activity in India, the Group has ventured out inte ether infrastructural projects of prime importance like Power & Energy generation from non-conventional resources and mining. 4.4: Organisational Structure5: Manufacturing Village Nabipur, District Fatehagarh Sahib (Punjab) and Village Katha, Badd, District Solan (HP). Processing Production ‘Soft drink bottling or manufacturing involves tive major processes, each with its own safety issues that must be evaluated and controlled: Treating water Compounding ingredients. Carbonating product. Filling product. Packaging. paupe Cece Grediae‘The production of soft drink begins with the preparation or “batching” of thick, flavored concrete containing various artificial and natural flavours (the concentrate is manufactured by and purchased from the parent company by the individual bottlers), sodium benzoate (preservative), sugar. and treated water. This syrup is checked by quality control tor conformance fo established company standarde and then pumped to the proportioner in the filing area. At the propertioner, the syrup and treated water pass through pre-set orifices at @ constant rate of flow and are blended at a ratio of approximately 1 part syrup to 5 parts of treated water. The product ie then pumped to the chiller/cartonator te produce the final saft drink of the proper carbonation and ted to the can or bottle filer. During the carbonating process the soft drink is chilled to approximately 2-5°C to prevent foaming during filing process. Roturnable bottles te be filled aro usually hand fed by the case onto a conveyor which carries the cases of empty bottles to uncaser. The uncaser removes the bottles trom the cases and places them onto the empty petite conveyer. From the uncaser.52% hot caustic solution for a specified time period and rinsed with fresh water prior to inspected either visually by employees or electronically by a light scanner to insure no foreign objects or debris Is left in the bottle. Non-returnable bottles and cans pass through a rinser which consists of a series of cold water spray. These sprays remove Eight packs of 2-tire son drink plastic botties on the way to an automatic ‘palietizer ‘The individual bottles are then filled, discharged from the filler, and conveyed. to the capperclosure machine where a crimp cap oF twist-of type closure is applied. water sprays inside the warmer to bring the temperature of the product to approximate room temperature. The purpose of the warmer is to avoid excessive condensation room temperature. Any condensation on the container's exterior would cause probloms for the rect of the packaging involved, including label application and fiber carton packaging.Attar the bottles are discharged from the warmer they are conveyed to the labeler and. of product travel to the pallotiser which automatically stacks the cases on a pallet for storage and shipping. 4.5: Business Plan model at KBL Let us look at the sequential system of the distribution network right from the beginning. [RE mere | | | | = 1 L~ [consumer ] +I Cece Grediae4.6: Distribution Network taking up the responsibility of distribution of products to diverse parts of the cities. The: distribution channels are constructed In such a way that the demand of customers is fulfilled at the right place and the right time when itis needed by them BD rom ware howe mB BAanalers eae ses cone ene reteset Greta stock ‘The customers of the Company are divided into different catagories and aifferent routes, and every ealesman ie assigned to one particular route, which is to be followed by him on a daily basis. A detailed anc well organized distribution system contributes 10 the efficiency of the salesmen. It also leads to low costs. higher sales and higher efficiency thereby leading to higher profits to the firm. 4.6.1; Distribution Routes ‘The various routes formulated by KEPL tor distribution of products are as follows: = Key Accounte: The customers in this category collectively contribute a large: Chunk of the total sales of the Company. It basically consists of organizations: that buy large quantities of @ product in one single transaction. The Company provides goods to these customers on credit. paymenta being made By them after a certain period of time Le. either a month of half a menth. Cece GrediaeFuture Consumption: This route consiete of outlets of Coca-Cola products, wherein a considerable amount of stock Is kept in order to use for future consumption. The stock does not exhaust within a day or two, instead as and when required stocks are siacked up by them so as 10 avoid shortage or nen- Examples: Departmental stores, Super markets ote Immediate Consumption: The outlets in this route are those which require stocks on a daily basis. The stocks of products in these outlets are not stored for future use intend, are exhausted on the same day and might run a little Into the next day Le. the products are consumed at a fast pace. Examples: Small sized bars and restaurants, educational institutions etc. General: Under this route, all the outlets that come In a particular area or ant area along with its neighboring areas are catered to, The consumption period Is not taken inte consideration in this particular route. Tho system adopted by the Chandigarh Bottling Company (CBO) to distribute hts products in the city Is, direct on-spot delivery on on-spet demand by the retail The salesman hired by the company is accompanied by an assistant and a Market Developer (MD). They carry all the sku's In the goods carrying truck and are assianed a specific route, on which they have to deliver al the products to all the retail outlets that falls along that route, and deliver as per the demand on-spot and get paid in cash (exceptions are there), Cece Grediae Direct distribution: In direct dictribution, the bottling unit or the bottlor partner has direct contro! over the activities of sales, delivery, and merchandising and= Indirect distribution: In indirect distribution, an organization which ie not part ©f the Coca-Cola system has control on one or more of the distribution elements (Sales, delivery, merchandising and local account management) = Merchandising: Merchandising means communication with the consumer at the point of purchase to convey product benefit, value and Quality. Sales People and delivery personne! both have this responsibility. In certain locations special teams who go into business locations to specifically merchandise our products. 4.6.2: Departments invelved in the Distribution process ‘The Distribution process mainly consists of three departments: + Distribution Department: It appoints distributors and establishes a distribution network, processes approved sale orders and propares invoices, arranges logistice and ship products, co-ordinates with distributors for collections and monitors distribution stocks and their set-up. = Finance Department: It checks credit limite and approves eales orders in compliance with the credit policy followed by the firm, records collections from distributors, periodically reconciles autetanding balances tram distributors, obtaine balance confirmation trom distributors and follows up outetanding = Shipping or Warenousing Department: It dispatches goods as per approved by order. ensures that stocks are dispatched on a FIFO basis, oncures Physical Control over load out area and updates warehouse stock records in a timely manner. Cece Grediae4.7: SWOT Analysis of KBL 4.7.1: Strengths + DISTRIBUTION NETWORK: The Company has a strong and reliable distribution network. The network is formed on the basia of the time of consumption and the amount of sales yielded by a particular customer in one. traneaction. It hae a dietribution network consisting of a number of efficient salesmen, 26,000 retail outlets. The distribution fleet includes different modes ©f distribution, from contracted transportation for goods carrying task of 10- tonne trucks te open-bay three wheelers that can navigate through narrow alleyways of Indian cities and trademarked three-wheelers. + STRONG BRANDS: The products produced and marketed by the Company have a strong brand image. People all around the world recognize the brands marketed by the Company. Strong brand names like Sprite, Fanta, Limca, Thums Up and Manza add up to the brand name of the Coca-Cola Company, as a whole. The red and white Coca-Cola is one of the very few things that are. recognized by people all over the world. Coca-Cola has been named the world’s top brand tor a fourth consecutive year in a survey by consultancy Interbrand, It was estimated that the Coos-Cola brand was worth $70.4Sbillion. = LOW COST OF OPERATIONS: The production, marketing and distribution systems are very efficient due to forward planning and maintenance of consistency of operations which minimizes wastage of beth time and resources + LOW EXPORT LEVELS: The brands produced by the company are brands: produced worldwide thereby making the export levels very low. Over that even domestic demands are sometimes go unfulliied. In India, there existe a major controversy concerning pesticides and other harmful chomicals in bottled Cece GrediaeProducts Including Coca-Cola. In 2003, the Centre for Science and Environment (CSE), = non-governmental organization in New Delhi, said aerated waters produced by soft drinks manufacturers in India, including multinational giants Pepsico and Coca-Cola, contained toxins Including ndane, DDT, malathion and chiorpyrifos- pesticides that can contribute to cancer and a breakdown of the Immune system. Therefore. people abroad. are apprehensive about Coca-Cola products from India. + IMPORT FROM OTHER MANUFACTURERS: Import of few particular packagina’s from other manufacturers ads a cost to the business, like s00n removed with the establishment of new bottling line in Saha, 4.7.3: Opportunities = LARGE DOMESTIC MARKETS: The domestic market for the products of the Cola India claims @ 58 per cont share of the soft drinks market: this includes a 42 per cent share of the cola market. Other products account for 16 per cont + HIGHER INCOME AMONG PEOPLE: Development of India as a whole has foad to an increase in the por capita Income thereby causing an increase in disposable Income. Unlike olden times, people now have the power of buying goods of their choice without having to worry much about the flow of their Income. The beverage industry can take advantage of such a situation and enhance their sales. 2 IMPORTS: As India ie developing at a fast pace, the per capita income has Cece Grediaelevels have gone high. People understand trade to a large extent and the onto imported beverages rather than have beverages manufactured within the country, it could pose a threat to the Indian beverage Industry as a whole In turn affecting the sales of the Gompany. = SLOWDOWN IN RURAL DEMAND: Tho rural market may be alluring but it Is not without ils problems: Low per capita disposable incomes that is half the dependence on the vagaries of the monsoon; seasonal consumption linked to harveste and festivale and epecial occasione: poor roade; power problema; and to. slowdown in the demand for the company’s products. Cece Grediae8: Products and Packaging Details Though the Coca-Cola Company owns the innovation of 9,800 drinks including beverages. tea and coffee, fresh juices. packaged water and energy drinks but, all of them are not dominant at every place. may be due te cultural, geographic, demographic, production and demand limitations. Kandhari Beverages Pvt. Ltd. In aeseciation with The Geca-Cola Company manutactures the following mentioned brands and in mentioned packagings. ez i i6 05 aa. & Sa oe g Cece Grediaeeo as The world's favourite drink. The world's most valuable brand. The most recognizable beginning in 1886, its now the flagship brand of the largest manufacturer, marketer and distributor of non-alcoholic beverages in the world. Coca-Cola retumed to India in 1992 and over the past fourteen years has enthralled consumers In India by connecting with passions of India. cricket, movies, music and food. Coca-Cola has been very strongly associated with cricket, sponsoring the world. cup in 1996 ana various other tournaments, including the Coca-Cola Cup in Sharjah in Aisi were very popular and had entered the youth's vocabulary. In 2002. Geca-Cola launched its iconic campaign “Thanda Matlab Coca-Cola’ which skyrocketed tho for just Rs.S across the country and this pricing initiative together with enhanced distribution eneured that all brands in the portfolio grew exponentially. Coca-Cola had signed on various celebrities including movie etare euch as Kariehma, the past and today, its brand = ambassador is Amir Khan. Cece GrediaeStrong Gola Taste, Macho Personality. Thums Up is a leading sparkling soft drink and most trusted brand in India. Originally introduced in 1977, Thums Up was acquired by masculine attitude. This brand clearly seeks to separate the men trom boys. Worldwide Sprite ig ranked as the No.4 soft drink & i sold in more than 190 one of the fastest growing soft drinks, loading the Clear lime catogory. Today Sprite is perosived as a youth icon. Why? With a strong appeal to the youth, Sprite has stood for straight forward and honest attitude. taste encourages the today's youth to trust their instinets, whe they are and to obey their thiret. hts clear crisp refreshing een LeedaInternationally, Fanta the ‘orange’ drink ef The Coca-Cola Company. 1 seen 1993, Over the years Fanta has occupied a strong market place and identified as ‘The Perceived as a fun youth brand, Fanta stands for ite vibrant color, tempting taste and Ungling bubbles that not just uplifis feelings but also helps free spirit thus encouraging one to indulge in the moment. This positive imagery Is associated with happy. cheartul and special time with tends. Lime ‘n! Lemoni Limea can cast a tangy refreshing spell on anyone, anywhere. Derived from ‘Nimbu' +'Jaisat hence Limesa, Limea has lived up to Its promise of decades. Born in 1971, Limon has remained unchallenged as the No.1 Sparkling Cece GrediaeDrink in the Cloudy lemon Segment. The success formula Is the sharp fizz and lemont bite combined with the single minded proposition of the brand as the provider of “Freshness”. Limea’s Freshness Is like no other. ‘time n lomont Limca rofreshness, reeneralzes, rejunevates not just your body but algo your emotions. The new Limea campaign takes platform relevant for the young-adult, whe pursue success and achievement, but sti want freshness to rejuvenate the fun, energy, excitement and romance in their lives. desire to rejuvenate her/his emetions which are constantly being dulled in routine pursuit of success. Minute Maid- A 62 year success story. The history of the Minute Maid brand g0ee ae far as back as 1946 when the Florida Foode Corperation developed orange orange juice, forming a frozen concentrate that when reconstituted created orange juice. They branded it Minute Maid, a name connoting the convenience and the ease of preperstion(in a minute). Minute Maid thus moved to the first ever orange juice fromMango. It is a fruit associated with good times like no other. Aptly called the king of fruits, mangoes are to mango lovers what romance is to a Casanova. Now Imagine this delicious frult, bottled. This Is what Maaza all about. Introduced In the lato loved for its taste, colour.thickness and wholesome properties, Maaza is the mango lover's first choice. Maaza'e universal appeal was responsible for the brand being recognized as a drink that provides ‘wholesome family fun’. Even today people hum the memorable lines-“taaza mango, maaza mango" and ‘botal main aam maaza hal naam’. Maaza was realiawed to be about the ultimate mange indulgence. And thie was This thought found voice creativity in the idea of “Tempting the mango expert. This surprise thon that Maaza soon became the most loved beverage rand in India. Today meaza has come a long way to stand as the ideal way to satiety one’s craving for mangoes. Aptly framed, the line “Maaza lao, aam Ki pyaas bujhao” symbolizes the very essence of mangoes that has been captured in a bottle. It provides consumers the most authentic experience of rich, juley mangoes to satisty their thirst for mangoes: anytime, anywhere!Boond Boond KS Main Vishy os Meh \ a the toxins away. A ritual purifier that cleanses, purities, transforms. Water, the most basic need of life, the very substance of life, a celebration of life itself. The importance: governs the lives of millions, be it as a part of everyday rituals or as the monsoon which gives life to the sub-continent Kinley water understands the importance and value of this ite giving force. Kinley be wuly sate and pure. Kinley water comes with the assurance of satety trom the Coca-Cola company. That is why we introduced Kinley with reverse-cemosis aling through rigorous testing procedure at each and every location where Kinley is produced. Because we believe that right to pure, safe drinking water is fundamental. A4.9: Competitors to KBL “The competitors to the products of the company mainly lie in the non-alcoholic beverage industry consisting of juices and soft drinks, The key competitors in the Industry aro as follows: © REPSICO: the Popaice cnalienge, to Koop Up wih archrival, the Coca-Cola Company never onde tor the World's # 2, carbonated soft-drink maker. The company's soft drinks Include Pepal, Mountain Dew, and alice. Gola te not ine company only beverage: Pepsico sella Tropicana orange julce brands, Gatorade spore drink, and Aquafina water, PepsiCo also sella Dole Julows and Lipton ready-to-drink taa. PapsiGe and Coca-Cola hold together. market share of 95% out of which 60.8% ia held by Caca-Gola and the rest — EI scsoon.rice gtiestnar mugh aicompation|in(Oose-Cola ae It mainly deals with milk products, Baby foods and Chocolates. But the ied tea that is Nestea which has been introduced into the market by Nestle Provides a considerable amount of competition to the products of the ‘Company. Iced tea 1s one of the closest substitutes 10 the Colas as Ht 1s a thiret quencher and it is healthier when compared to fizz drinks. The Mlavored milk growing health awareness ameng people. Cece GrediaeCompany and the products of the Company. Apart from food products, Dabur These products give a strong competition to Maaza and the latest product Minute Maid Pulpy Orange. Parte Agro fart =s"> « : -Godre} and Bisterl: On local levels these three pose a great threat to our products. Parle'e Froot, Godre/'e Jumpin, and Bieler: Water and Taaza maaza are hampering the Sales of Coca-Cola's products on the margins. ‘The competitors to KBL are those whe are competitors to Coca-Cola, and net any other franchise of our competitors. Rival Pepel's biggest bottler in Punjab ie the Cece GrediaeChapter 5: FINANCIAL ANALYSIS OF COCA-COLA hatest..12.Menths, Rata.ttems: Latest Full Context Quarter Ending Date (2010/03) ‘Guiek Ratio ‘Pre-Tax Prafit Marain Interest Coverage 27.0 or '5-Year Averages: Return on Equity 28.5% Current Ratio 13 24.2% Return on Invested Capital Nat Pron Margin (Total Operations) 20.6% Current PTE Ratio 5-Year High P/E Ratio B-Vear Ave: PE Cece Grediae19% on a comparable currency neutral basis, reflecting a 2% impact due to the daconsolidation of certain entities required by a change in accounting guidance, aa weil as geographic mix + First quarter 2010 reported operating Income increased 17%, and comparable currency neutral operating Income increased 9%. This was driven by a continued strong focus on cost management and the leveraging of productivity initiatives as ‘woll as favorable timing of selling, general and administrative expenses. + Cash from operations in the quarter increased 52% to $1.3 billion. There were no share repurchases during the first quarter due to the pending Coca-Cola Enterprises (CCE) transaction. During the quarter, the Company announced its 48th consecutive annual dividend Increase, raising the quarterly dividend 7% from 41 cents to 44 conte per common share. This is equivalent to an annual dividend of $1.76 per share, up from $1.64 per share in 2009, ‘The PER CAPITA CONSUMPTION of Coca-Cola Beverage Products, 20 | oyanse 2p iz Figures ore in LitresPos (631.944 billion 2009 5.186 billion 008 97.571 billion 2007 $7.180 bition 2006 5.957 billion 008 Booe 007 Po0e ‘Ovor the past 3 years, Coca Gola has had a respectable 8.7% in annual revenue growth, $6.906 billion $5.507 billion $5,981 billion 35.080 billion earnings growth over the past three years, “The most recent year, trom 2008 to 2009, caw growth in 2010 and 9.6% EPS growth in 2011, Annually, that’s a cash flow growth rate of over 1196. Coke nas grown stock dividends by 8.776 increase, trom 2009 to 2010, was a 7.9% Increase. The payout ratio is a moderate 56%, so 7008 grow.The company has also been repurchasing shares annually. In 2009, they repurchased $1.5, billion worth of shares, Cece Grediae st = st st 52 $3.28% 3.04%Chapter 6: STRATEGIC MANAGEMENT BY COCA-COLA 6.1: Strategies it means that you try te give Image to your product in the mind of the customers. To give a true and positive picture of the product ie the best positioning. The company, should promote its good points or comparative advantage which it has over its. competitor. In ordor to serve your target market you Introduce different things to your preduct so that your product can be differentlated from other products. Basis of Ditferentiation There are many bases on which a product can be differentiated but Goke has differentiated its product on the following base: + Product Ditferentiation- Coke aifferentiate its product from its competitors on the basis of brand, quality and taste. + Imago Differentiation- Logo Is used for image differentiation. Loge Is identification, signature and image. Coca-Cola has kept on changing its logo trom time to time. Price Strategy Trade Promotion Coca-Cola Company gives incentives to micidie men oF retailers in a way that they offer them free samples and free empty bottles, by this these retailers and middle man, Cece GrediaeAnd they have a good sale In the market because according to the expert which ‘These stores are called as KEY accounts in their local language. And coke also invest heavy budget on these stores and offers them free samples and {ree bottles and some time cash incentives. ment Strategies: Coca-Cola Company use different mediums for advertisement. + Print media : They offen use print media for advertisement. They have @ separate = TV commercial : As everybody know that TV Ia a most commen entertaining medium 90 TY commercials ie one of tne most altractive way of doing advertisement. Se Goca- Cola Company does regular TV commercials on different channels, 6.2: Our Competitive strategies ‘The Coca-Cola Company Is one of the largest, most successful and most Widely recognized comorations in existence. Coca-Cola is a dominating force in the beverage Industry and sets a very high standard of competion. Flesearch shows that factors contributing to Coca-Cola's success, however, we believe that their key success actors are Marketing. Innovation, and Globalization. Coca-Cola is seen as one of the founding fathers of the modern day marketing model. They were ameng the pioneers of advertising techniques and styles used to capture an audience. They were also one of the first companies to offer a gimmick with their product, this being a mini yo-yo. It was around 1900 when Coca-Cola began Cece GrediaePresenting their signature drink as a delicious and refreshing formula. This slogan has intense marketing campaigns, Goke has developed an image that is reflected in what we think of when we buy Coke and what we associate with drinking Coke. This Image has been subconsciously installed in our brain by the advertising campaigns that show Coca-Cola associated with “geod times, Coca-Cola has been able to survive and grow in an ever-changing market because of ite ability to aystematically innovate and deliver new products. Inthe late three straight years of falling profits, It was apparent that the market was changing and in order to Keep up with these changes, Coca-Cola had to move from a single past success was base on having one successful core product. oca-Cola began to omploy a strategy referred to as “play te win innovation.” The company began operating In a decentralized environment that was unfeasible in previous years. Now Coca. Cola otters nearty 400 different products in and ie still dominating the beverage, Industry. This Is made possible by the company’s ability to Innovate and adapt to changing markets. Today's big business takes place on a global scale, and Coca-Cola te no exception. Technology is continually changing business, and these constant changes have been making it more feasible and profitable for businesses to expand their operations global world, This global view is reflected in Coke's recent "I'd like to teach the world to sing’ commercial. Coca-Cola is taking advantage of the large revenue opportunitios made possible by participating in a global market and now offers products in 200 countries, around the world in order to gerve all different types of diverse markets around the Cece Grediae6.3: Industrial Environment and 5 Forces Model for Coca-Cola Applying Porter's 5 ferces allows the gamering a retrospective view of the potential attractiveness in terma of protitabllity of the company. Analyzing the beverage industry wa more accurate autleak on ite potential. 6.4: COCA-COLA COMPANY- THE SWOT ANALYSIS The Coca-Cola Company (Coca-Cola) it @ leading manufacturer, distributor and marketer of Non-alcoholic beverage concentrates and syrups, in the world. Coc: Cola has a strong brand name and brand porttolio. Business-Week and Inter brand. a Cece Grediaebranding Limea Common drink. Fanta basically preferred by Ladies and Kids. Maaza straight attitude of today’s youth, Kinley Soda Mostly those whe consume liquor Coneuttaney, recognize Goca-Cola as one of the leading brands in their top 100 global brand ranking in 2008. The Business Week- Interbred valued Coca-Cola at 867,000 million in 2008. Coca-Cola ranks well ahead of its close competitor Pepsi which has a ranking of 22 having a brand value of $12,690 million; The Company's strong brand value faciiitates customer recall and allows Coca-Cola to penetrate have an adverse impact on the company’s market share. SWOT Analysis Strengths Weaknesses, Internat + Poputarity = Word of mouth = well known = lack of popularity of many + branding obvious and ensily Coca-Cola's branes recognized = Most unknown and rarely eeen + Alot of finance = result of low profile or nen- © customer loyalty existent advertising + International Trade = health issues Threats ‘Opportunities External + changing health = omany successful brands to consciousness attitude: pursue + tegat tesues + advertise ite leas popular = competition (Peps = buy out competition. Cece Grediae