INTERNSHIP REPORT

ON
LAYS PAKISTAN

SUBMITTED TO:
Principal:
Center of financial excellence
Affiliated with University of the Punjab, Lahore

SUBMITTED By:
Mohammad Bilal Gulzar
MBA(Marketing)
REG#14-18-40020
[email protected]

1
 TABLE OF CONTENTS

1.THE EXORDIUM 4

1.1 ACKNOWLEDGEMENT 5

1.2 OVERVIEW OF THE ORGANIZATION 6

1.3 BRIEF HISTORY OF THE ORGANIZATION 6

1.4 ABOUT LAYS 7

1.5 FORMULATION 9

1.6 VISION STATEMENT 11

1.7 MISSION STATEMENT 11

1.8SATEMENT AND POLLICES 11

1.9 BUSINESS VOLUME 14

1.10 PROFIT AND LOSS ACCOUNT 15

1.11HEAD OFFICE DETAIL 18

1.12AUDIT FIRM AND ADRESS 18

1.13STAFF STRENGTH 19

1.14CEO MASSAGE 20

1.15MANAGEMENT HIERARCHY 21

1.16PRODUCT LINE 21

1.17ORGANATION STRUCTURE 23

1.18COMPANY STRUCTURE 24

1.19CFO 26

1.20TOP TEN ROLS OF CFO 26

1.21ROLE OF FINANCIAL CONTROLER 29

1.22FINANCIAL ANAYSIS34

2
1.23 FINANCIAL STAEMENT 39

124 INTERNSHIP PROGREMME 41

1.25.1 PEST ANAYSIS 42

1.26 SLOGANS 43

1.27 FLAVOURS 43

1.28 COMPITITION 45

1.29.GRAPH 46

1.30NATURE OF THE BUINESS 46

2.1 KEY OBJECTIVES 47

2.2 MANAGEMENT ENVIRONMENT 48

2.3 MACRO ENVIRONMENT 44

2.4.SWOT ANAYSIS 52

2.5 MANAGEMENT STATEGY 55

2.6 PERMOTION PLANING 61

2.7. CONCLUSION 95

2.8. RECOMMENDATION 96

2.9 REFERNCES 98

2.10. ANNEXES 99

2.11Reference

3
 THE EXORDIUM

Nothing is deserving worship Almighty Allah, the most Merciful, Compassionate and
Gracious. All praises for him because he is the creator of this mysterious universe and
guides us with the Holy Prophet Mohammed (Peace be upon him) and Holy Quran to
explore it. We supplicate that Allah grant us serenity to accept the things we cannot
change, courage to change the things we can, and wisdom to know the difference.

4
 ACKNOWLEDGEMENT

Above all we are indebted to almighty Allah, lord of our life and of everything in the
universe and his HOLY PROPHET MUHAMMAD (peace be upon him) whose
blessings enabled us to perceive and pursuit higher ideas of life.

The project of FOUR P’S OF MARKETING is the result of our day and night efforts,
which we have made to, complete this extensive and informative project. Certainly we
have been able to complete this project with the help of numerous factors, which played a
key role in it.
“THE PROFOUND EFFECT OF A TEACHER UPON THE STUDENTS CAN BE
DESCRIBED BY THE LIVES OF HIS STUDENTS”
(PRINYA NATALYA)

We deem it with an honor and privilege to record sense of gratitude to the respected
resource person PRO. UMER WAHEED for his constructive style of teaching and
maintaining very open and competitive atmosphere within the class.
We really liked our respected resource person for his full command on the subject and
unconventional style of teaching. This made the subject very comprehensive and
understandable.
We feel it a liability to offer heartiest thanks to all our respondents who helped us in
completing this project and all our teachers for their inputs and suggestions, which helped
us a lot.

5
 OVERVIEW OF THE

ORGANIZATION
Lay's is the brand name for a number of potato chip varieties as well as the name of the
company that founded the chip brand in 1938. Lay's chips are marketed as a division of
Frito-Lay, a company owned by PepsiCo Inc. since 1965. Other brands in the Frito-Lay
group include Fritos, Doritos, Ruffles, Cheetos and Rold Gold pretzels.

HISTORY

Native American chef George Crum invented potato chips in 1853 while working in a
New York hotel. The snack food became popular during the 1920s following the
mechanical potato peeler. As distribution increased, a number of small companies began
manufacturing and selling the product.

In 1932 salesman Herman W. Lay opened a snack food operation in Nashville, Tennessee
and, in 1938; he purchased the Atlanta, Georgia potato chip manufacturer "Barrett Food
Company," renaming it "H.W. Lay & Company." Lay criss-crossed the southern United
States selling the product from the trunk of his car. In 1942, Lay introduced the first
continuous potato processor, resulting in the first large-scale production of the product.

The business shortened its name to "the Lay's Company" in 1944 and became the first
snack food manufacturer to purchase television commercials, with Bert Lahr as a
celebrity spokesman. His signature line, "so crisp you can hear the freshness," became the
chips' first slogan along with "de-Lay-sious!" As the popular commercials aired during
the 1950s, Lay's went national in its marketing and was soon supplying product
throughout the United States.

In 1961, the Frito Company founded by Elmer Doolin and Lay's merged to form Frito-
Lay Inc., a snack food giant with combined sales of over $127 million annually, the
largest of any manufacturer. Shortly thereafter, Lays introduced its best-known slogan

6
"betcha you can't eat just one." Sales of the chips became international, with marketing
assisted by a number of celebrity endorsers.

In 1965, Frito-Lay merged with the Pepsi Cola Company to form Pepsico, Inc. and a
barbecue version of the chips appeared on grocery shelves. A new formulation of chip
was introduced in 1991 that was crisper and kept fresher longer. Shortly thereafter, the
company introduced the "Wavy Lays" products to grocer shelves. In the mid to late
1990s, Lay's modified its barbecue chips formula and rebranded it as "K.C. Masterpiece,"
named after a popular sauce, and introduced a lower calorie baked version and a variety
that was completely fat-free (Lay's WOW chips containing the fat substitute olestra).

In the 2000s, kettle cooked brands appeared as did a processed version called Lay's Stax
that was intended to compete with Pringles, and the company began introducing a variety
of additional flavor variations.

Frito-Lay products presently control 55% of the United States salty foods marketplace.

ABOUT LAYS

International

• In Argentina, Lays was commercialized before 2001 with the name

Frenchitas and Chizitos for the Cheetos.

• In Australia, PepsiCo acquired The Smith's Snackfood Company in 1998 and

marketed Frito-Lay products under that label, using the name Thins. After
Thin's was sold to Snack Brands Australia (Owned by Arnotts), Smith's
produced a line of potato chips under the Lay's brand for a brief period of
time. The Lay's line was eventually rebranded in 2004 as Smith's Crisps,
while the traditional Smith's line was renamed Smith's Crinkles. This is still
sold in Australia as a direct competitor to Smith's Crisps.

7
 • In the Benelux Lay's are sold in three varieties: Lay's, Lay's Light and Lay's
Sensations (Thai Sweet Chili/Red Paprika/Oven Roasted Chicken and
Thyme). Lay's Super Chips (Heinz Ketchup/Mexican Pepper/Perfect
Pickles/Salt 'n' Pepper (all through Delhaize) and Lay's Baked Chips
(Mediterranean Herbs/through Delhaize). As with Doritos, Lay's are
manufactured, distributed and imported in The Netherlands by Frito Lay's
Benelux division, Smith's Food Group. Lay's used to be called Smiths in the
Netherlands until the name was changed in 2001.

• In Brazil, products used to be distributed under the Elma Chips label. In 2016,
though, they were all rebranded to simply state Lay's

• In Colombia, the chips are sold under the name Margarita. They are still
commercialized under the label Lay's, however.

• In Egypt, Lay's was once sold under its own label until it was merged with the
local label Chipsy which has since become the local unit of Lay's under much
the same arrangement as Walkers.

• In India, cricketer Mahendra Singh Dhoni and Bollywood actors Saif Ali
Khan and Ranbir Kapoor endorse Lay's.

• In Indonesia, Lay's products are distributed by Indofood.[5]

• In Iran, Lay's products are distributed as Sensation by MazMaz.

• In Israel, the Lay's label is distributed with the name Tapuchips (‫ )תפוצ'יפס‬by
Strauss-Elite.

• In Italy, Lay's are distributed in by Ferrero SpA since 2014.

8
 • In Mexico, PepsiCo acquired Sabritas S. de R.L. in 1966. Lay's along with
other products such as Cheetos, Fritos, Doritos and Ruffles are marketed
under the Sabritas brand. The logo for the Mexican company sports the red
ribbon, but it has a stylized smiling face instead of the sun. It controls around
80% of the market there.

• In Pakistan, the Lay's brand is endorsed by renowned pop star Ali Zafar.

• In Romania, Lay's is the best sold and the most bought chips brand in that
country, being followed by Chio Chips. Lay's bought its own terrain to grow
potatoes for chips on in early 2008's, making chips out of their own potatoes.

• n South Africa, Lay's are distributed by the Simba Chip company since
1998.[6]

• In United Arab Emirates, Lay's and Walkers are sold as different labels.

• In the UK, Lay's is known as Walkers. Walkers flavors include Cheese &
Onion, Ready Salted, Salt & Vinegar. Walkers also makes Sensations-branded
crisps in the UK. The logo used by Lay's and Walkers is noticeably similar,
featuring a red ribbon around a yellow sun; it derives from the Walkers logo
used in 1990. The other Frito-Lay brands are also distributed through the
Walkers label.

• In Vietnam, Lay's products are distributed as Poca.

FORMULATION

Native American chef George Crum invented potato chips in 1853 while working in a
New York hotel. The snack food became popular during the 1920s following the

9
mechanical potato peeler. As distribution increased, a number of small companies began
manufacturing and selling the product.

In 1932 salesman Herman W. Lay opened a snack food operation in Nashville, Tennessee
and, in 1938; he purchased the Atlanta, Georgia potato chip manufacturer "Barrett Food
Company," renaming it "H.W. Lay & Company." Lay criss-crossed the southern United
States selling the product from the trunk of his car. In 1942, Lay introduced the first
continuous potato processor, resulting in the first large-scale production of the product.

The business shortened its name to "the Lay's Company" in 1944 and became the first
snack food manufacturer to purchase television commercials, with Bert Lahr as a
celebrity spokesman. His signature line, "so crisp you can hear the freshness," became the
chips' first slogan along with "de-Lay-sious!" As the popular commercials aired during
the 1950s, Lay's went national in its marketing and was soon supplying product
throughout the United States.

In 1961, the Frito Company founded by Elmer Doolin and Lay's merged to form Frito-
Lay Inc., a snack food giant with combined sales of over $127 million annually, the
largest of any manufacturer. Shortly thereafter, Lays introduced its best-known slogan
"betcha you can't eat just one." Sales of the chips became international, with marketing
assisted by a number of celebrity endorsers.

In 1965, Frito-Lay merged with the Pepsi Cola Company to form Pepsico, Inc. and a
barbecue version of the chips appeared on grocery shelves. A new formulation of chip
was introduced in 1991 that was crisper and kept fresher longer. Shortly thereafter, the
company introduced the "Wavy Lays" products to grocer shelves. In the mid to late
1990s, Lay's modified its barbecue chips formula and rebranded it as "K.C. Masterpiece,"
named after a popular sauce, and introduced a lower calorie baked version and a variety
that was completely fat-free (Lay's WOW chips containing the fat substitute olestra).

In the 2000s, kettle cooked brands appeared as did a processed version called Lay's Stax
that was intended to compete with Pringles, and the company began introducing a variety
of additional flavor variations.

10
Vision Statement

To deliver top-tier financial performance over the long

term by integrating sustainability into our business strategy, leaving a positive
imprint on society and the environment.

Mission Statement

To provide consumers around the world with

delicious, affordable, convenient and complementary foods and beverages from
wholesome breakfasts to healthy and fun daytime snacks and beverages to
evening treats

The main points of PepsiCo’s mission statement are as follows:

1. Consumers around the world

2. Delicious, healthy and fun products
3. Affordability
4. Convenience

Statements and Policies

As one of the world's leading food and beverage companies, public policy affects
PepsiCo's ability to operate a successful business, and continue to provide shareholder
value. For this reason, we believe that active participation in public policy is essential and
appropriate for companies in open societies. To demonstrate transparency, PepsiCo has
adopted a variety of statements and policies that are publicly available on our website
below.

Political Contributions Policy

The health of democratic societies depends on citizens being responsibly engaged in the
political process.

The PepsiCo Concerned Citizens Fund (CCF) receives voluntary employee contributions
to make political campaign contributions to U.S. federal and state political parties,
committees and candidates. The CCF and the company's corporate contributions provide
an important opportunity for PepsiCo, and its employees, to participate in the democratic
process.

11
The PepsiCo Concerned Citizens Fund (CCF) receives voluntary employee contributions
to make political campaign contributions to U.S. federal and state political parties,
committees and candidates. The CCF and the company's corporate contributions provide
an important opportunity for PepsiCo, and its employees, to participate in the democratic
process.

We believe that providing financial support to responsible pro-business candidates is an

important means by which we help improve the business climate, our quality of life and
the society in which we live, enabling us to succeed as a company committed to integrity,
innovation and value.

Human Rights Policy

PepsiCo's Human Rights Workplace Policy

PepsiCo respects the dignity of our workers in the workplace and we work to ensure our
associates' rights to personal security, a safe, clean and healthful workplace, and freedom
from harassment or abuse of any kind.

We deal fairly and honestly with our associates regarding wages, benefits and other
conditions of employment, and recognize our associates' right to freedom of association.
We do not use compulsory or child labor.

We do not tolerate discrimination and work to ensure equal opportunity for all associates.

We comply with all applicable laws, regulations, and other employment standards,
wherever we operate or work.

We encourage our partners, suppliers, contractors and vendors to support these policies
and we place substantial value on working with others who share our commitment to
human rights.

Download Human Rights Workplace Policy

Responsible Research Statement

PepsiCo's Responsible Research Statement

PepsiCo's research processes and those of our partners are confidential for competitive
reasons. However, PepsiCo does not conduct or fund research - including research funded
by PepsiCo but performed by third parties - that utilizes any human tissue or cell lines
derived from embryos or fetuses.

12
Animal Testing Policy

PepsiCo's Statement on Animal Testing

PepsiCo does not conduct any animal tests and does not directly fund any animal tests on
its beverages and foods. Where governmental agencies require animal tests to
demonstrate ingredient safety, companies using those ingredients rely on third party
testing.

PepsiCo has shared our concern regarding the ethical and humane treatment of animals
with our suppliers and others in the industry. We encourage the use of alternative testing
methods whenever and wherever possible and have financially supported research to
develop these alternative methods.

Genetically-Modified Food and Ingredient Policy

Global Genetically-Modified Food And Ingredient Policy

PepsiCo is dedicated to producing the highest quality, greatest tasting food and beverage
products in every part of the world. PepsiCo ensures all products meet or exceed stringent
safety and quality standards and uses only ingredients that are safe and approved by
applicable government and regulatory authorities.

Approval of genetically-modified foods differs from country to country regarding both

use and labeling. For this reason, PepsiCo adheres to all relevant regulatory requirements
regarding the use of genetically-modified food crops and food ingredients within the
countries it operates.

Where legally approved, individual business units may choose to use or not use
genetically-modified ingredients based on regional preferences.

13
Business volume
Actual volume of the distribution business
SALES (R.S) VOLUME COMPARISON WITH YAGO

VLOMUE
GROWTH
YEARS 2015 2016 2017 TOTAL

Jan 16104227.2 16870200 19231129 52205556.2 14%

Feb 15490414.8 17281433.6 18099728.2 50871576.6 5%

March 17086629.6 18082858 20301776 55471263.6 12%
April 17385506.8 15639419.4 20372914.8 53397841 30%
May 14914000.8 14356031.8 19125034.6 48395067.2 33%
June 15881411.6 16128779.2 18065138.4 50075329.2 12%
July 18405698.2 17757841.6 19308759.2 55472299 9%
Aug 18016418.8 20408347.8 21602405.8 60027172.4 6%
Sep 20816456.6 19452537.2 20745305.4 61014299.2 7%
Oct 19429882.4 19213390.8 20790100.4 59433373.6 8%
Nov 18725922 18393347.8 19052496.46 56171766.26 4%
Dec 15032898.2 17684551.4 17312599.76 50030049.36 -2%
TOTAL 207289467 211268738.6 234007388 652565593.6 11%

SALES COMPARISON In KG’S WITH YAGO

VLOMUE
GROWTH
YEARS 2015 2016 2017 TOTAL
Jan 25974.56 27210 31017.95 84202.51 14%
Feb 24984.54 27873.28 29193.11 82050.93 5%
March 27559.08 29165.9 32744.8 89469.78 12%
April 28041.14 25224.87 32859.54 86125.55 30%
May 24054.84 23154.89 30846.83 78056.56 33%
June 25615.18 26014.16 29137.32 80766.66 12%
July 29686.61 28641.68 31143.16 89471.45 9%
AUG 29058.74 32916.69 34842.59 96818.02 6%
Sep 33574.93 31375.06 33460.17 98410.16 7%
Oct 31338.52 30989.34 33532.42 95860.28 8%
Nov 30203.1 29666.69 30729.833 90599.623 4%
Dec 24246.61 28523.47 27923.548 80693.628 -2%
TOTAL 334337.85 340756.03 377431.271 1052525.151 11%

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 PROFIT & LOSS ACCOUNT 2016 & 2017

INCOME STATEMENT

2,016 2,017

Income

252.70 312.70
Volume (Tons)

153,919,167.90 202,792,063.59
Gross Revenue

Distributor 10,588,261.67 13,635,237.39

Margin

Value
Subsidy &
Allowances

Van
672,000 280,000.00
Suzuki
360,000 240,000.00
Shahzore

- 3,691,938.00
DSR

2,576,189.00 2,603,492.61
DTA
823,616.00 1,135,662.82
Stale
25,366,843.00
TPR
3,959,805.00 33,317,936.43
Total

17,548,066.67 46,953,173.82
Total Income

15
 P&L

Expenses 2,016 2,017

Warehousing & Qty Rate Value Value
Backend Expense
Warehouse and
Office Rent 1 70,000 840,000 840,000

Warehouse Loaders 3 8,000 288,000 96,000

Warehouse Incharge 1 17,000 204,000 204,000

Key Punch Operator 1 17,000 204,000 288,000

Accountant - -
Cashier 1 15,000 180,000 150,000
Office Boy 1 6,000 72,000 -
Sweeper 1 2,500 30,000 30,000
Security Guard 1 10,000 120,000 216,000
Total 1,938,000 1,824,000

Selling & Admin Qty Rate Value Value

Expenses
Sales Supervisor 1 29,000 348,000 408,000
Rented Vehicles -
Suzuki Rent (incl.
driver & fuel) 7 28,600 2,402,400 2,995,200

Shahzore Rent (Inc.

driver & fuel) 2 45,000 90000*12 936,000
Salary -
DSR 9 5,300 572,400 4,717,848
Deliveryman 9 11,000 1,188,000 1,560,000
Total 8,386,800 10,617,048
Trade Spend Value Value
Market Discount (by
distributor) 1,800,000 2,996,472

TPR (PEP funded) 25,145,788 32,134,764

W/H Tax (Registered

Retailers) 3,000,000 2,940,000
Total 29,945,788 38,071,236

Other Expenses

Legal & Professional 60,000 24,000

Misc. Admin Expense 120,000 -

Entertainment 60,000 120,000
Stationary 60,000 36,000
Utilities Qty Rate Value Value
Tel. 50,000 -
Internet 1 3,000 36,000 30,000
Electricity 1 4,000 48,000 42,000
Water 1 500 6,000 36,000
Total 440,000 288,000
Actual Stale 858,996 984,000
Total Expenses 39,631,584 51,784,284
4,016,439
Net Profit / Loss 3,702,984

16
 RETURN ON INVESTMENT

ROI

Investment 2,016 2,017

Market Credit 42% 84,000,000 92,400,000

Pending Claims 4,800,000 193,512

Inventory on floor 7.7 Days 54,000,000 49,049,640

Warehouse Security
Deposit 2,400,000 2,400,000

Owned Vans /
Triwheelers

Other Assets
(Furniture, Computer,
etc.) 1,200,000 1,500,000
146,900,000 174,057,072
Total 76%

31.80% 33.84%
ROI

17
Lay’s Head Office Contact Details
PepsiCo Head Office Address : 37 C-1 Gulberg 3, Lahore, Pakistan

PepsiCo UAN Phone Number : +92 42 111 724 725

PepsiCo Office Phone Numbers : 042-35872167, 042-35872162

PepsiCo Office Fax Number : 042-35753303

AUDITOR FIRMS AND ADDRESE

A.F. Ferguson & Co.

23-C, Aziz Avenue

Canal Bank
Gulberg V
Lahore, Punjab 54660
Pakistan

Telephone: [92] (42) 35715864-71

Telecopier: [92] (42) 35715872

About A. F. Ferguson & Co.

A.F.Ferguson & Co. is one of the leading public accounting, business advisory and
corporate services firms in Pakistan.

We strive to provide a broad and coordinated range of excellent, timely, value-for-money

services that help our clients make the best business decisions. We are committed to
meeting the expectations of our clients by maintaining international standards and fully
exploiting the advantages of technology.

Our clients are those blue chip companies, financial institutions, multinationals and
others who demand a firm with the highest reputation for integrity and quality. The
Pakistan firm of A. F. Ferguson & Co. came into existence on November 1, 1952 when
the old firm of the same name was split into two independent entities. The origin of the
firm however goes back to 1893. The Pakistan firm of A.F.Ferguson & Co., was formed
on November 1, 1952 by a deed, signed and stamped in Pakistan, at Karachi.

18
At present the firm has 44 partners based in three offices i.e. Karachi, Lahore and
Islamabad.

A.F.Ferguson & Co. is a member firm of the PwC network, the world largest professional
services organization. The firm has ready access to the technical expertise present in the
PwC network firms worldwide and also participates in their training programmes.
Selected members of staff are seconded to PwC offices abroad to gain international
exposure. The firm’s work standards are subject to extensive reviews on a regular basis
by PwC and also by the Quality Control Review Committee of The Institute of Chartered
Accountants of Pakistan.

Drawing on the knowledge and skills of more than 223,000 people in 157 countries, PwC
provides a full range of business services to leading global, national and local companies
and to public institutions. These services include audit, accounting and tax advice;
management, information technology and human resource consulting; financial advisory
services including mergers and acquisitions and business process outsourcing.

STAFF STRENGHT YEARWISE

2016 2017
OWNER 4 2
Territory sales officer 1 1
ACOUNTANT 3 3
SUPRVISOR 2 2
DSR (ORDER BOOKERS) 30 35
PSR (SALESMEN) 30 35
CASHIER 5 7
KEY PUNCING OPERATOR (KPO) 5 6
WHERE HOUSE KEEPER 4 4
OFFICE BOYS 5 5
LOADERS 10 10
TOTAL 99 110

19
 CEO Indra K. Nooyi

Chairman and Chief Executive Officer, PepsiCo

INDRA K. NOOYI has been PepsiCo’s Chief Executive Officer since 2006 and assumed
the role of Chairman of our Board of Directors in 2007. She was elected to our Board and
became President and Chief Financial Officer in 2001, after serving as Senior Vice
President and Chief Financial Officer since 2000. Ms. Nooyi also served as PepsiCo’s
Senior Vice President, Corporate Strategy and Development from 1996 until 2000,
and Senior Vice President, Strategic Planning from 1994 until 1996. Prior to joining
PepsiCo, Ms. Nooyi served as Senior Vice President of Strategy, Planning and Strategic
Marketing for Asea Brown Boveri, Inc. She was also Vice President and Director of
Corporate Strategy and Planning at Motorola, Inc. Ms. Nooyi has served as a director of
Schlumberger Ltd. since April 2015. Ms. Nooyi also serves on the boards of the
International Cricket Council and several non-profit organizations, including the U.S.-
India Business Council, the Consumer Goods Forum, Catalyst, Lincoln Center for the
Performing Arts, Tsinghua University School of Economics and Management, the
World Economic Forum and the Asia Society. She also serves on the Americas Advisory
Panel of Temasek International Pte. Ltd., a Singapore-based investment company.
BOARD OF DIRECTORES

Casar conde Shona Brown Geoge.W

20
 MANAGEMENT HIERARCHY

PRODUCT LINES

Lays

Lay's is the name of a brand for a number of potato chip varieties, as well as the
name of the company that founded the chip brand in the U.S. in 1932. It is also
called Frito-Lay. Lay's has been owned by PepsiCo since 1965.
"Lay's" is the company's primary brand, with the exception of limited markets
where other brand names are used: Walkers in the UK and Ireland; Smith's in

21
Australia; Chipsy[1] in Egypt; Poca in Vietnam; Tapuchips in Israel;[2] Margarita
in Colombia; Sabritas in Mexico; and, formerly, Hostess in Canada.

Cheetos
Cheetos (formerly styled as Chee-tos until 1998) is a brand of cheese-flavored puffed
cornmealsnacks made by Frito-Lay, a subsidiary of PepsiCo. Fritos creator Charles Elmer
Doolin invented Cheetos in 1948, and began national distribution in the U.S. The initial
success of Cheetos was a contributing factor to the merger between The Frito Company and
H.W. Lay & Company in 1961 to form Frito-Lay. In 1965 Frito-Lay became a subsidiary of
The Pepsi-Cola Company, forming PepsiCo, the current owner of the Cheetos brand.
In 2010, Cheetos was ranked as the top selling brand of cheese puffs in its primary market of
the United States; worldwide the annual retail sales totaled approximately $4 billion. The
original Crunchy Cheetos are still in production but the product line has since expanded to
include 21 different types of Cheetos in North America alone. As Cheetos are sold in more
than 36 countries, the flavor and composition is often varied to match regional taste and
cultural preferences—such as Savory American Cream in China, and Strawberry
Cheetos in Japan.[1]

Kurkure
Kurkure is a brand of corn puffs, developed and produced by Pepsico India and Pakistan, the
India and Pakistan division of PepsiCo.[1] Named after the Hindi and Urdu word for "crunchy",
the snackwas developed entirely in India. It was launched in 1999 in India and in 2007 in
Pakistan and has its automated plants at Channo (Punjab), Kolkata and Pune.

Kurkure Nuts and Nimko

Kurkure Pakistan recently launched their new Nimko and Nuts line that is available in all
major cities throughout Pakistan. This line comprises of Kurkure Nimko Mix, Kurkure Salted
Peanuts and Kurkure Masala Peanuts. The product stands out in its rich Taste, Freshness, and
un matched quality credentials.

22
 ORGANIZATIONAL STRUCTURE

What Type of Organizational Structure Does Fritolay

Have?
PepsiCo is well known for its Pepsi beverage products. This multinational corporation is
also responsible for the production of Frito-Lay, Gatorade, Tropicana and Quaker
products. November 2007 marked a change in the company’s organizational structure
from two units to three.

Pre-November 2007
PepsiCo is comprised of PepsiCo North America and PepsiCo International. PepsiCo
North America consists of Frito-Lay North America, PepsiCo Beverages North America
and Quaker Foods North America.

Current Structure
PepsiCo consists of three units: PepsiCo Americas Foods, PepsiCo Americas
Beverages and PepsiCo International. PepsiCo Americas Foods encompasses Frito-Lay
North America, Quaker and all Latin American food and snack businesses. PepsiCo
Americas Beverages oversees Pepsi-Cola North America, Gatorade, Tropicana, and all
Latin American beverage businesses. PepsiCo International is responsible for PepsiCo
business in Europe, Asia, and Africa.

Type
PepsiCo is an adaptive organization, as they are continuously seeking constant
improvement and keeping new ideas in the marketplace while its products progress
along their life cycles. PepsiCo has a decentralized organizational structure, with
operational decisions made within the separate business units while being governed by
policies at the corporate level.

Who
PepsiCo’s chairman and CEO is Indra Nooyi. The Americas Foods, Americas Beverages
and International divisions are headed by John Compton, Massimo d’Amore and Michael
White, respectively.

Why Change?
According to Chairman Nooyi, "PepsiCo’s robust growth has enabled the company to
manage three units instead of two." The realignment enables PepsiCo to focus more
resources on emerging international markets, especially in Asia, decreasing its
dependence on domestic revenues. Furthermore, PepsiCo will be able to better focus

23
marketing efforts of lower calorie and less sugary products on the increasingly health-
mindful United States market.

DEPARTMENT OF THE COMPANY

FINANCE DERPARTMENT

ACCOUNT OFFICER

MANAGER FINANCE

ASSIT.MANAGER FINANCE

DEPTY MANAGER FINANCE

The finance department is one of the most important department of the fritolay

It records operating transections analysis them and prepare financial statements that
inform top management and managers about our company economic health

24
FUNCTIONS OF THE ACCOUNTS/ FINANCE AND AUDIT .

• Book keeping
• Obtaining and managing finance
• Budget control
• Accounts payable
• Accounts receivable
• Credit regulation and polices
• Bill processing /claims processing
• Anticipation of funds
• Acquisition of funds
• Allocations of funds
• Assessment of funds
• Assessment and appraisal of financial activities
• Preparation of budget and financial report
• Managing the general ledger
• Investment of funds
• Managing associated ricks
• Implement long term financial plans
• Liaising with external auditor
• Developing strategies of capital budgeting
• Capital structure and debt financing
• Decision involving capital investment
• Maintain cash management
• Monitor the collection of past due accounts
• Credit rick management
• Monitoring expenditure and liquidity
• Reporting financial performance to the board
• Managing investment and taxation issues
• Providing timely data to manager
• Implement annual business planes/cash flow projection monitoring
and interpreting
• Cash flows
• Managing cost of capital
• Establish credit rating criteria

25
Chief financial controller

The financial controller is a core financial position within a commercial

organization, SME, or multinational company. Almost all companies will
employ a professional in this capacity. It is a popular role amongst accounting
and finance professionals, and such candidates with strong experience are
highly sought-after by employers.

Controller Duties
• To make the job of a controller more lucid, a list of the financial controller
responsibilities includes the following:
• Maintain all the necessary reporting to the banks and backup system reports
• Maintain the company bank balance and remain cognizant of outstanding checks
• Approve invoices that need to be paid
• Read and review any documentation attached to checks for approval and
accuracy sake
• Follow up with customers that are over 45 days old
• Make sure all financial statements and tables are correct and precise
• Make sure that the owner of the company receives the company bank statement
unopened
• Reconcile all bank statements and monthly financial reports
• Prepare monthly sales and use tax returns
• Prepare projections annually and update monthly with actual figures
• The controller must coordinate with the auditors and be prepared to surrender
documentation if called upon
• Coordinate with the tax division of the company and prepare any schedules
required for tax returns
• Maintain the renewals on company insurance

TOP TEN ROLES OF CFO

THE ROLE OF CFO

The top ten responsibilities of CFO

✓ Cash flow
✓ Company liabilities
✓ Company performance
✓ Department supervision
✓ Financial relationship
✓ Financial of rising capital
✓ Financial obligation

26
 ✓ Record control
✓ Shareholder relations
✓ Budgeting and expense control

1. Cash Flow
As a new Chief Financial Officer, your job is to control the cash flow position throughout
the company, understand the sources and uses of cash, and maintain the integrity of
funds, securities and other valuable documents. You receive, have custody of, and
disburse the company’s monies and securities. New CFO responsibilities include the
authority to establish accounting policies and procedures for credit and collections,
purchasing, payment of bills, and other financial obligations. Cash is king and the flow of
cash, or cash flow, is the most important job a new CFO has in any company.

2. Company Liabilities
After cash flow, part of the new CFO responsibilities is to understand all of the
company’s liabilities. A company has many legal contracts, statutory & tax obligations,
hidden liabilities in the form of contingencies, leases, or insurance summaries, and
expectations from loan covenants and/or the board of directors. As a new CFO, if you’re
not watching out for the liabilities, who is?

3. Company Performance
The new CFO must understand the company business model for generating customer
value and translate the operational metrics into measures for performance. The new CFO
is the company scorekeeper using tools like the balanced scorecard, dashboards, and
financial statement ratio analysis to communicate both the company’s expected and
actual financial performance.

4. Department Supervision
In a small organization, the CFO is the supervisor of Accounting, Finance, HR, and IT. In
a larger company, the CFO responsibilities may only include the Accounting and Finance
functions. Either way, the new CFO supports the company’s accounting and financial
functions using job descriptions, policies, and procedures, and methods for automating
document control.

5. Financial Relationships
As a new CFO, you establish and maintain lines of communication with investment
bankers, financial analysts, and shareholders in conjunction with the President. You

27
administer banking arrangements and loan agreements and maintain adequate sources of
capital for the company’s current borrowings from commercial banks and other lending
institutions. In addition, you invest the company’s funds and administer incentive stock
option plans.

6. Finance or Raising Capital

You would think that finance is one of the key CFO responsibilities. Yes, it is important,
but it comes after other more pressing operational issues, like those listed above. The new
CFO will establish and execute programs for the provision of capital required by the
company, including negotiating the procurement of debt and equity capital and
maintaining the required financial arrangements. As the new CFO, you’ll coordinate the
long-range plans of the company, assess the financial requirements implicit in these
plans, and develop alternative ways in which financial requirements can be satisfied.

7. Financial Obligations
As the new CFO, you need to approve all agreements concerning financial obligations,
such as contracts for raw materials, IT assets, and services, and other actions requiring a
commitment of financial resources.

8. Record Control
The new CFO is responsible for the financial aspects of all company transactions
including real estate bids, contracts, and leases. The CFO also provides insurance
coverage, as required, ensures the maintenance of appropriate financial records, prepares
required financial reports, insures audits are completed in time and statutory book closing
occur. One of the primary CFO responsibilities is ensuring company compliance with
financial regulations and standards, like Sarbanes-Oxley, the IRS Tax Code, and GAAP
(and soon, IFRS).

9. Shareholder Relations
A new CFO analyzes company shareholder relations policies, procedures, and
information programs, including the annual and interim reports to shareholders and the
Board of Directors, as well as recommends to the President new or revised policies,
procedures, or programs when needed.

10. Budgeting and Expense Control

Budgets are a fact of life, and the new CFO is responsible for overseeing the budget
process, collecting the inputs, and comparing the company’s actual performance with
estimates (the budget). It is an ugly process that falls within the CFO area of control.

28
 ROLE OF FINANCIAL CONROLLER

Financial Manager
Financial activities of a firm is one of the most important and complex activities of a
firm. Therefore in order to take care of these activities a financial manager performs
all the requisite financial activities.

A financial manger is a person who takes care of all the important financial functions
of an organization. The person in charge should maintain a far sightedness in order
to ensure that the funds are utilized in the most efficient manner. His actions directly
affect the Profitability, growth and goodwill of the firm. In order to meet the
obligation of the business it is important to have enough cash and liquidity. A firm
can raise funds by the way of equity and debt. It is the responsibility of a financial
manager to decide the ratio between debt and equity. It is important to maintain a
good balance between equity and debt

Financial Manager Responsibilities

A financial manager is responsible for providing financial guidance and
support to clients and colleagues so they can make sound business
decisions.As a financial manager, you will need a good head for figures
and for dealing with complex modelling and analysis, as well as a sound
grasp of financial systems and proceduresYou may be employed in many
different environments including both public and private sector
organisations, such as: Clear budgetary planning is essential for both the
short and long term, and companies need to know the financial
implications of any decision before proceeding.In addition, care must be
taken to ensure that financial practices are in line with all statutory
legislation and regulations.Financial managers may also be known as
financial analysts or business analysts.The roles of financial managers can
vary enormously. In larger companies for instance, the role is more
concerned with strategic analysis, while in smaller organisations, a
financial manager may be responsible for the collection and preparation of
accounts.In general, tasks across roles may include:

• providing and interpreting financial information

• monitoring and interpreting cash flows and predicting future trends
• analysing change and advising accordingly
• formulating strategic and long-term business plans
• researching and reporting on factors influencing business
performance

29
Financial Manager responsibilities can Be Divided Into Two
Broad categories.

• Managerial financial Responsibilities

• Corporate Financial Responsibilities

1- Managerial financial Responsibilities.

Managerial finance concerns itself with the managerial significance of finance.
It is focused on assessment rather than technique. For instance, in reviewing an
annual report, one concerned with technique would be primarily interested in
measurement. They would ask: is money being assigned to the right categories?
Were generally accepted accounting principles (GAAP) followed?A person
working in managerial finance would be interested in the significance of a firm’s
financial figures measured against multiple targets such as internal goals and
competitor figures.They may look at changes in asset balances and probe for red
flags that indicate problems with bill collection or bad debt as well as analyze
working capital to anticipate future cash flow problems.Sound financial
management creates value and organizational ability through the allocation of
scarce resources amongst competing business opportunities. It is an aid to the
implementation and monitoring of business strategies and helps achieve
business objectives.

2- Corporate Financial Responsibilities.

Corporate finance is the area of finance dealing with monetary decisions that
business enterprises make and the tools and analysis used to make those
decisions. The primary goal of corporate finance is to maximize shareholder
value. Although it is in principle different from managerial finance, which studies
the financial decisions of all firms, rather than corporations alone, the main
concepts in the study of corporate finance are applicable to financial problems of
all kinds of firms.The discipline can be divided into long-term and short-term
decisions and techniques. Capital investment decisions are long-term choices
about which projects receive investment, whether to finance that investment with
equity or debt, and when or whether to pay dividends to shareholders. On the
other hand, short-term decisions deal with the short-term balance of current
assets and current liabilities; the focus here is on managing cash, inventories,
short-term borrowing, and lending (such as the terms on credit extended to
customers).The terms corporate finance and corporate financier are also
associated with investment banking. The typical role of an investment bank is to
evaluate the company’s financial needs and raise the appropriate type of capital

30
that best fits those needs. Thus, the terms “corporate finance” and “corporate
financier” may be associated with transactions in which capital is raised in order
to create, develop, grow, or acquire businesses.

Risk and the Financial Manager

An important part of the financial manager's role and responsibility is considering how
risk is to be managed.The control and mitigation of risk costs money and takes up
management time, so it is critical that we can understand the benefits of risk
management and compare these to the costs to assess whether a risk management
strategy is worthwhile.This page initially introduces an overview of risk management in
relation to capital investment projects, then explains some specific examples of risks.
More detailed techniques for risk management, such as the use of derivatives and Value
at Risk..

1- Risk and stakeholder conflict

Shareholders will invest in companies with a risk profile that matches that required for
their portfolio.Management should thus be wary of altering the risk profile of the business
without shareholder support.An increase in risk will bring about an increase in the
required return and may lead to current shareholders selling their shares and so
depressing the share price.Inevitably management will have their own attitude to risk.
Unlike the well-diversified shareholders, the directors are likely to be heavily dependent
on the success of the company for their own financial stability and be more risk averse
as a consequence.

2- Type of business area

Based on the risk appetite of the firm, decisions must be taken about those types of
activity suitable for investment. This will involve decisions about the acceptability of:

• economic volatility of the industry

• degree of seasonality
• intensity of competitor action.

3- Operating gearing

The level of operating gearing of the firm is the proportion of fixed costs to
variable in the cost structure. Whilst some industries are destined to have higher
levels of operating gearing than others (compare the travel industry with
manufacturing for example), policy decisions about what level is acceptable will
drive choices about factors such as:

• outsourcing v. providing internally

• leasing v. buying

31
 • full-time staff v. freelance providers.

4- Accuracy of forecasts
The success of any planned investment programme will rely heavily on the accuracy of forecasts
of future cash flows (in and out) and an NPV assessment also relies on an accurate calculation of
the discount rate. The sensitivity of these forecasts can be calculated, and the probability of the
variation assessed, but in the end the directors must decide what level of risk they are willing to
accept in order to accept or reject the project.

5- The risk framework

All projects are risky. When a capital investment programme commences, a framework for
dealing with this risk must be in place.

This framework must cover:

• risk awareness
• risk assessment and monitoring
• risk management (i.e.strategies for dealing with risk and planned responses should
unprotected risks materialise)

6- Risk awareness
In appraising most investment projects, reliance will be placed on a large number of estimates.
For all material estimates, a formal risk assessment should be carried out to identify:

• potential risks that could affect the forecast

• the probability that such a risk would occur.

Risks may be:

• strategic
• tactical
• operational.

Once the potential risks have been identified, a monitoring process will be needed to alert
management if they arise.

Strategic risks are those affecting the overall direction and outcome of the project, such as
changes in macroeconomic factors or changes in corporate policies.

Tactical risks affect the way the various parts of the project are interlinked, the way resources are
acquired or the way in which the business functions involved in the project are run.

Operational risks are those affecting the day to day running of the project.

7- Risk assessment and monitoring

32
A useful way to manage risk is to identify potential risks (usually done in either brainstorming
meetings or by using external consultants) and then categorise them according to the likelihood
of occurrence and the significance of their potential impact.

Decisions about how to manage the risk are then based on the assessment made.

These assessments may be time consuming and the executive will need to decide:

• how they should be carried out

• what criteria to apply to the categorisation process and
• how often the assessments should be updated.

The essence of risk is that the returns are uncertain. As time passes, so the various uncertain
events on which the forecasts are based will occur. Management must monitor the events as they
unfold, reforecast predicted results and take action as necessary. The degree and frequency of
the monitoring process will depend on the significance of the risk to the project's outcome .

8- Risk management

Risk can be either accepted or dealt with. Possible solutions for dealing with risk include:

• mitigating the risk - reducing it by setting in place control procedures

• hedging the risk - taking action to ensure a certain outcome
• diversification - reducing the impact of one outcome by having a portfolio of different
ongoing projects.

9- Strategies for dealing with risk Mitigation

• All companies should have in place a comprehensive system of controls. These controls play an
essential role in good corporate governance and mitigate risk by working to prevent, or
detect and correct potential risks before they become a problem.
• Management would be expected to implement controls over most material risks subject
to the following:
o The cost of the control should not be disproportionate to the potential loss.
o For non-routine events it may be more practical to devise a specific strategy for
dealing with the risk should it arise.

10- Diversification

• This involves reducing the impact of one outcome by having a portfolio of different
ongoing projects.
• Within the context of a single project, this may take the form of selling to a number of
different customers to reduce reliance on a single one or sourcing from a number of
different suppliers.
• For businesses operating internationally, it may involve locating key parts of the business
in different countries.
• Diversification would be chosen wherever reliance on a single source of resource has
been identified as a potential risk.

33
FINANCIAL ANALYSIS

Financial analysis is the process of evaluating businesses, projects, budgets and

other finance-related entities to determine their performance and suitability.
Typically, financial analysis is used to analyze whether an entity is stable,
solvent, liquid or profitable enough to warrant a monetary investment. When
looking at a specific company, a financial analyst conducts analysis by focusing
on the income statement, balance sheet and cash flow statement.

Types Of Financial Analysis.

• Index Analysis ( Horizontal Analysis)

• Common Size Analysis ( Vertical Analysis)
• Ratio Analysis

Horizontal Analysis.
(also known as trend analysis) is a financial statement analysis technique that
shows changes in the amounts of corresponding financial statement items over a
period of time. It is a useful tool to evaluate the trend situations.

The statements for two or more periods are used in horizontal analysis. The earliest
period is usually used as the base period and the items on the statements for all
later periods are compared with items on the statements of the base period. The
changes are generally shown both in dollars and percentage.

Dollar and percentage changes are computed by using the following formulas:

Horizontal analysis may be conducted for balance sheet, income statement,

schedules of current and fixed assets and statement of retained earnings.

Example: An example of the horizontal analysis of balance sheet, schedule of

current assets , income statement statement of retained earnings is given below:

Horizontal analysis includes the analysis of

• Balance sheet
• Income statement

COMMON SIZE ANALYSIS ( VERTICAL ANALYSIS)

34
Vertical analysis is a method of financial statement analysis in which each entry
for each of the three major categories of accounts, or assets, liabilities and
equities, in a balance sheet is represented as a proportion of the total account.
Vertical analysis is also used across other financial statements as a percentage
measure. Vertical analysis reports each line item of a financial statement as a
representation of the percentage of the statement's main focus. For an income
statement, each line item can be representative of gross sales. On the balance
sheet, each line item can be representative of total assets. In a cash flow
statement, each line item can be expressed as a percentage of the firm’s total
cash and cash equivalents.

Vertical Analysis

• Balance Sheet
• Income Statement

The central issue when creating a vertical analysis of a balance sheet is what to use as
the denominator in the percentage calculation. The usual denominator is the asset total,
but one can also use the total of all liabilities when calculating all liability line item
percentages, and the total of all equity accounts when calculating all equity line item
percentages. An example of vertical analysis for a balance sheet is shown in the far right
column of the following condensed balance sheet:

Ratio Analysis

A ratio analysis is a quantitative analysis of information contained in a company’s

financial statements. Ratio analysis is used to evaluate various aspects of a
company’s operating and financial performance such as its efficiency, liquidity,
profitability and solvency.

Ratio analysis is a cornerstone of fundamental analysis.

• Liquidity Ratio
• Leverage Ratio
• Activity Ratio
• Market Ratio

1- Liquidity ratio

Liquidity ratio are used to determine a company’s ability to meet its short term
obligation.

These are includes .

• Current Ratio

35
 • Acid Test Ratio
• Working Capital Ratio

Current ratio.

The current ratio is a liquidity ratio that measures a company's ability to pay
short-term and long-term obligations. To gauge this ability, the current ratio
considers the current total assets of a company (both liquid and illiquid) relative
to that company’s current total liabilities. The formula for calculating a company’s
current ratio is:

Current Ratio = Current Assets / Current Liabilities

The current ratio is called “current” because, unlike some other liquidity ratios, it
incorporates all current assets and liabilities.

Current Ratio = 29746651 / 20997903

Current Ratio = 1.416

Comparison Of Ratios :

Comparison Ratios : 2016 2017

Current Assets 20082568 9664083
Current Liabilities 10337827 6660076
Current Ratio 1.942 1.451

Acid Test Ratio.

What Dose Acid Test Ratio Mean ?

Acid Test Ratio= Quick Assets / Current Liabilities

Quick Assets = Current Assets – ( Stock + Prepaid Expenses )

36
This Ratio Answer In Times

It Is calculated by:

Quick Ratio = Quick Assets / Current Liabilities

Quick Ratio = 25260077/16997903

Quick Ratio = 1.486

Comparison Of Ratio:

Comparison Ratios : 2016 2017

Quick Assets 16829582 8430495
Current Liabilities 10337827 6660076
Current Ratio 1.627 1.268

Working capital:

What does working capital means ?

A measure of both a company’s efficiency and its short term financial health.

Also called net current assets or current capital.

Formula = Current assets – Current liabilities

20082568-10337827= 9744741

Leverages Ratios

Leverages ratios measure the degree of protection of suppliers of long term

funds.
These Includes:
• Time Interest earned
• Debt ratio
• Debt / equity ratio
• Debt To tangible net worth ratio
• Total capitalization ratio

37
Time Interest earned

What does time interests earned mean ,

A matric use to measure of company ability to meet its debt obligations
Formula = ( EBIT ) Earnings before interest and tax / Interest Expenses
The Ratio answer in time.

DEBT RATIO
What dose debt ratio mean:
Debt ratio indicate the percentage of the company assets that are provided via
debt or liability.
Formula= Total liabilities/Total assets

Debt Ratio =113325835/69432342=0.61

Debt Equity Ratio

What dose debt equity ratio mean:
It indicate what proportion of equity and debt the company is using to
finance its assets a measure of company financial leverage.
Formula=total liabilities /total shareholder equity

This Ratio answer in%

Total capitalization ratio

What does long term debt to Capitalization Ratio mean:
The capitalization Ratio measure the debt component of a company capital
structure or capitalization (i.e the sum of long term debt liabilities and
share holder equity to spot a company operation and growth.
Formula=long term debt /(long term debt +share holder equity)

38
 BALANCE SHEET
PARTICULARS 2016 2017
Non-Current Assets
Property,Plan,Equipment 36,891,844 3,98,51244
Long Term Loan 1,25,30222 1,35,19331
Long Term Loan & Advances 236,644 5,49,899
Sub Total 39,658,710 43920474
Current Assets
Stores,Spares,Loose Tools 840254 192236
Stock In Hand 3252986 1233588
Accounts Receivabales 9990488 5288287
Due From Related Parties 3654295 729586
Short Term Loans 646419 261555
Short Term Deposites & Payments 581180 789832
Other Receivabales 543725 549518
Cash & Bank Balance 573221 619481
Sub Total 20082568 9664083
Total Assets 59741278 53584557
Equity & Laibilities
Share Capital 18000000 18000000
Reserves 7315151 9119288
Sub Total 25315151 27119288
Current Laibilities
Trade & Other Payments 6551045 3752077
Due To Related Parties 1804333 846806
Bank OverDraft 1982449 1073222
Long Term Loans 987971
Sub Total 10337827 6660076
Total Equity 35652978 33779364

39
 INTERNSHIP PROGRAMME
ACTIVITY PERFORM DETAIL

In internship program I learn practical knowledge about fritolay and perform

many activities which I feel most beneficial for me in future and I discuss the as
weekly basis.

WEEK 1ST

During my first week of internship I visit all the department of fritolay pvt Ltd
link Marketing, finance, information technology and store department. Where I
introduced to the staff of the department

Week 2nd

In my second week of internship in fritolay I was directed to the finance

department. The finance department is one of the most important department of
fritolay. It records operating transactions analyzing them prepare financial
statement that inform top management and manager about our company health.

ACTIVITIES PERFORMED
I learned about the head of finance department in which all activities are
performed related to the finance department which are as follows,

• Payable head
• Receivable head
• Accounts head
• Cash management head
• Reporting head

Week 3rd

In 3rd week of my internship program I start the practical work from the payable
head and I learn all procedure of buying goods and payments to supplier
procedure and there credit term and period

40
ACTIVITIES PERFORMED

I learn about buying and payment to supplier procedures

Week 4th:

In 4th week I shifted to Store department where I learn how to make ready the order in
the given time zone prefer by the customer. When the sales order against P.O generated
by customer forwarded to store is accepted marketing department gives instruction to the
store department to ready the order according to the syllabi and in the given time zone.
Packing requirements are also sending by the marketing department.

Week 5th:

In my 5th week of internship I transferred to the MARKETING department. Marketing is

the main and the most involving department because it manages the other department’s
activities, as the order been placed and been approved by the customer through the
marketing department so, it has to manage the order with in the time as it manages the
publishing, printing , binding , Packing to the end customer. They have to plan all these
activities about how much paper is required, packing accessories Management, and the
planning about the fulfillment of the customer requirement. I learn that every department
plays vital role and everything must be up to the mark and to be perfect according to the
requirement of the customer if we want to satisfy our customer.

Week 6th:

I shifted in the in ADMIN department where I learn about the time management and how
to control the whole operation in office. When the order is ready then the products are
send for delivery. When the ADMIN have good behavior with all staff the operation will
run smooth.

Week 7th:

I also worked for the information and technology where I learn about that information
and technology department where I comes to know that this department is the back bone
of every manufacturing concern. It plays a vital role in the design of the products such as
purchase of the raw material and sold of the scrap in the market at the best prices.

41
Final week:

That day was the big day for me because I was given the chance to do the main work
with the Accounts department. This week was the longest week because I do many things
and do lot of office work. I learn about the whole process of account department and
double entry system

PEST Analysis

PEST Analysis is a measurement tool which is used to assess markets for a particular
product or a business at a given time frame. PEST stands for

• Political Factors
• Economic Factors
• Social Factors
• Technological Factors

Once these factors are analyzed organizations can take better business decisions. Many
external factors can affect your business. It is already a habit for managers to evaluate
each of these factors closely. The goal is to always make better decisions for the firm’s
progress

42
Political

The political scenario also matters greatly as there can be some civil unrest in certain
markets or due to inflation the sales of the product can fall. Most importantly, cross
border situations are starkly different therefore fritolay has to stay in line with all those
policies and changes so that they can adapt to all those changes accordingly.

Economic

As the recent economic downturn has plagued the economy, companies had to restructure
their sales and marketing campaigns greatly. Economic conditions have the highest
influence on a business, regardless of what trade it is in. Though, in fritolay favor, the
economic turn start that resulted in increased sales of its product sales

Social
Social factors greatly impact fritolay as it’s has monopoly in many of its product. Also, ftitolay
has to communicate its image as a Country brand so that the people can associate it with
themselves as something that connects the across Pakistan. Usually, the social implications are
seen in marketing campaigns for example certain firms arrange tours for their employee also
fritolay arrange its annual tour to keep its employee efficient.

SLOGANS

• That's another reason to smile! Lay's Potato Chips (2007)

• Food for the fun of it! (2007)
• Lay's, get your smile on! (2006-)
• Lay's. Want some?
• Betcha can't eat just one (1960s-present)
• Lays ka mazaa lo(Lay's Pakistan)meaning-Have fun with Lay's
• You can't eat just one....Lagi bet! (Lay's India)
• Har programme ka main food (Lay's India)meaning- The main food for every
programmme
• No one can eat just one (Lay's India)

FLAVOURS

43
Except for barbecue-flavor potato chips, which were introduced no later than 1958, up
until the last 20 years, the only flavor of potato chips had been the conventional one.
Despite an explosion of new flavors, the unadorned original is still the selection of 81%
of consumers.

In the Pakistan, Lay's offers a number of flavor combinations, in addition to the classic
chips. Flavored products in the traditional fried varieties include

• Barbeque (Wavy)
• Salted
• French cheese
• Masala
• Yogurt and herb
• Ketchup

Nutritional information

Bag of Lays Baked Chips

As a snack food, the Lay's brands contain very few vitamins and minerals in any variety.
At ten percent of the daily requirement per serving, vitamin C is the highest. Salt content
is particularly high, with a serving containing as much as 380 mg of salt.

A one ounce (13 gram) serving of Lay's regular potato chips has 130 calories and
contains ten grams of fat, with three grams of saturated fat. Kettle cooked brands have
seven to eight grams of fat and one gram of saturated fat but are 140 calories. Lays
Natural has nine grams of fat, two grams of saturated fat and 150 calories. Stax typically
contain ten grams of fat, 2.5 grams saturated fat and are 160 calories per serving. Wavy
Lays are identical to the regular brand except for a half-gram less of saturated fat in some
combinations. The various brands do not contain any trans fats.

The baked variety feature 1.5 grams of fat per one ounce serving, and have no saturated
fat. Each serving has 110 to 120 calories. Lay's Light servings are 75 calories per ounce
and have no fat.

44
Lays Classic Potato chips are cooked in 100% pure sunflower oil (originally
hydrogenated oil until January 1st, 2007). A one ounce serving has 150 calories, 90 of
which are from fat, 10 grams of fat, and 1 gram of saturated fat.

They have many flavors in the baked lays as well. Baked lays are produced in cheddar,
barbecue, and original.

Level and Type of Competition:

Their competition strategies are based on the competitor’s strategy. They don’t follow the
price war competitive strategy. They follow the standard of product and quality in
competition. Their competition type is oligopoly.

Competitors:

One can’t imagine about a business without competition. Lays has also some competitors.
Major threats to Lays are Oye Hoye, Kolson and Golden, Tripple Em which has almost
45% of the market share. But as quality of the product play an important role that is not
up to the standard by the competitors. So, Lays is outstanding in all ways to the
competitors like quality, quantity, price and variety of the products etc.

Competitors Products & Activities:

Following Competitor’s products are being sold in the market but their product
availability is not that good. The only reason for their presence is the Credit facility and
high margins.

• Niralla
• Smith
• Bunny
• Kolson
• Sadiq Dry Fruit
• Golden
• Tripple Em

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 100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Lays 45% Kolson Golden Smith Tripple Em Others
15% 8% 5% 15% 12%

GRAPH

Lays = 45%
Kolson = 15%
Golden = 8%
Smit = 5%
Tripple Em = 15%
Others = 12%

NATURE OF THE BUSINESS

Snacks are of two types, Extruded and Potato Chips. “KURKURE” lies in the extruded
item which comes under FMCG Products (fast moving consumer goods).

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Key Objectives
Like every business the primary objective of LAY’S Company is to be flourishing and
earn more profits. But it’s possible only when the company understand the environment
of the market, where:

1. Different types of customer in this region who consider low price but still want
for high quality.
2. Currently weak competition for a multinational company regarding quality with
price.
3. A handsome share of the market is still vacant.
4. Company’s own profit orientation by producing in bulk quantity and reducing
cost.
5. Strong distribution channels are helpful to distribute and sale quickly and can
generate high turn over.

Therefore they pursue following objectives:

1. Produce high quality product at reasonable low price.

2. Facilitate as maximum share of market as they can.
3. Customer satisfaction is the top priority.
4. Acquire the strong distribution channel so the product is made available on the
shelf.

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MARKETING ENVIRONMENT

MICROENVIRONMENT

Research & Development

Company has established their own plant at plot no 413, Sunder industrial Estate,
Raiwind Road, Lahore. Its working and efficiency is under consideration. Experts are
there to watch out and examined the machinery as well as production unit. They are also
ensuring that its production is fulfilling the requirements in due time. Experts make it
sure that they are producing Quality products. (Maintaining their quality standards)

Production

Company was importing “KURKURE” from China and Lays chips from “Saudi Arab”
through its supplier “Saudi Snack Food” Company has started its production at its New
Plant at Raiwind road Lahore on 14th August 2006. That improves the performance of
the company. The time period of importing the product is eliminated. Raw material can
be available in local market, so it would reduce the budget for raw material. The time
span right from the production to distribution will squeeze and efficiency will be
enhanced.

Suppliers

Company was importing Lays chips from “Saudi Arab” from 1st June 2005 through its
supplier “Saudi Snack Food” and has a strong bond with them but now LAY’S CHIP’S is
produced in Pakistan.

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Marketing Intermediaries

To execute an assortment of necessary functions to get the product to the final customers
lay’s has one major distributor, Shahbaz brothers in Pakistan.

Shahbaz brothers having maximum of their targets and maximum margins which is 14 %
are their major distributors they are covering area of Gulberg, Defence, Cant, Sadar, Taj
Bagh, Taj Pura and Jalo etc.

Order placement to Main Depot which is situated at Gulberg II, Pepsi office is weekly
based and within 48 hours supplies arrives from Main Depot to Distributors Depot from
where they distribute them to different retailers. Distributors are covering 70 to100 shops
daily to fulfill their target in the end of the month period. For distribution available
vehicles are vans, Suzuki and shahzors (only for Shahbaz Brothers).

Customers

The strategic focus of a business or a marketing plan of lay’s Company is that they are
targeting Youth, Girls and housewives (opinion leaders).

The company needs to study five types of customers like consumers, business, resellers,
International and government. But in the case of lay’s only consumers are exist.

Public

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All the public groups has an impact on lay’s, banks from they have obtained loan,
advertising agencies from whom they have run their advertising campaigns, govt. will
also because they have an opportunity to collect tax and employees also because they
have to earn from this.

MACRO ENVIRONMENT

Demographic

Lay’s are not specifically concerned with any religion, race, occupation, family life cycle
or sex and has a target market in every societal group. Main concerned segment is girls,
housewives and youth. Who have experienced high product consumption level? But they
are also targeting families, as they understand this influence factor in this region.

Economic

All income groups are favorable for the business of Lay’s although those are not who are
working class (labors).

Increased government intervention (political)

“KURKURE” is a legally registered company and applying labor laws and market laws
of Pakistan. But it is known to them that Government interaction got much importance in

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every business and if there are some restrictions on them then it may be a hurdle in their
way to success. That’s why some harsh Government rules may influence a wrong impact
on company’s goals and achievements in future.

Natural

Lay’s as an extruded item, made of vegetables, although these are natural resources but
still there are not harmful to the nature. And there is rare chance of shortage of raw
material in this case.

Cultural

Lay’s is not as such a product which can be affected by the culture and tradition (primary
& secondary) changes. Infect, it is based upon the culture of South Asia (Sub-continent)
and Pakistan

Technological

Lay’s being the product of PEPSI International and having a good repute in international
market are already using modern technology to enhance the production and the quality.

Marketing Objective

Company is having very clear perception about the target market which is
explained as follows:

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 • Company want to capture as many share of the market so that the company
maximize its market share.

• Customer attraction towards the product is very important and without this
phenomena company can’t fulfil its targets.

• Strong distribution channel is the foremost element and is required more when the
need increases, so the company should also focus on them and will give them
certain benefits as well as the retailers.

• Profit maximization is always prior magnitudes for every company for that
purpose they reduce the cost of production to enhance the turnover of the
company.

SWOT Analysis
Strengths

• Almost all income level especially below 5000 and even above 10000 can buy
and consume LAY’S.

• Brand conscious people like it most.

• LAY’S being the multi national company having the huge investment spending
massive amount on advertising campaigns to aware the customer towards LAY’S

• People are comfortable with the Price of LAY’S.

• Placement is becoming a plus point it means company is emphasizing on its

distribution and placement strategies.

• LAY’S chips have a strong brand image at their back like Lay’s and also PEPSI
International.

• LAY’S is the blend of maximum satisfaction at minimum price that’s why

customers are much satisfied by LAY’S chips. We can say it that

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 Value = Satisfaction

• LAY’S chip is such kind of product which has no any restriction of age or gender.

• LAY’S being a new product in snacks which is also useful for health conscious
people because it is made of grains (wheat, rice and many others).

• LAY’S chip is such type of snacks which is always ready to consume.

• They also give incentives to retailers

• Human Capital is the main strength of LAY’S.

Weaknesses

• Facing the enormous competitors prevailing in the market.

• Competitors like Kolson and Triple M are investing heavily in branding.

• Although they are trying to make their efforts best to make their supply excellent
but still they are not reached to the rural areas of Pakistan.

• Some areas like Highways (especially on Motorway) and many others exist in
Pakistan where still LAY’S cannot manage to fulfill their requirements and where
the products of competitors are available.

• Elite class of your society are not consuming too much as compared to the
middle and others due to the price as we can say the status problem

• At that time LAY’S only offering four flavors.

• LAY’S are not providing any extra facility or benefit to the customer.

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 Opportunities

• Supply of this product in the remote areas of Pakistan.

• Improvement in its Quality as there is always room for the improvements in

anything.

• Addition of new local flavors helps a lot to sustain in the market.

• Sponsoring major events and festivals for huge awareness campaigns.

• Try to make supply in all the areas where the other competitors are existing
already.

• Design such strategies and advance planning to become the market leader in the
smallest span of time.

• Introduce the family and economy pack to serve the large families which also cost
you cheaper and ultimately will accepted by the consumer.

• Try to serve the elite class according to their status and requirement.

• Make advertisement in suburban and rural areas and give incentives to the shop
personals so that also motivate towards it.
• LAY’S has an opportunity to introduce a less spicy or light flavor to increase
their consumer ship and target market.

Threats

• Competitors like kolson and Tripple M are the biggest threats to our product.

• Indirect competitors are also contributing in the same way.

• BUSCUITS and NIMKO hold major share of Market.

• New entrants can also the threat for the LAY’S chips and may create hurdles in
the growth.

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 • Small companies that are not a problem at that time may become the main
competitors or threats to LAY’S chips.

• On arrival of LAY’S Kolson introduced a new flavor in their brand Slanty which
may divert the attention of consumer towards them from LAY’S chips.

• There are many substitutions in the case of snacks which is the great threat for
LAY’S chip’s.

• People usually like variety in flavors which is the up coming threat to the LAY’S
because they have only four flavor .

• Govt. policies may affect the growth of the lay’s chips.

MARKETING STRATEGY

LAY’S Target Markets

LAY’S is such kind of product which is designed for the region of south Asia specially
the sub-continent (Pakistan and India) where the people like spicy kinds of food and
snacks including urban and suburban areas.

LAY’S is not concerned with any religion, race, occupation, family life cycle or gender
and has a target market in every social class. Main concerned segment is youth who have
experienced high product consumption level. But they are also targeting families, as they
understand this influence factor in this region.

Except lower classes of our society, every social class and income level is favorable for
the company.

LAY’S is usually consumed on occasionally basis, providing the better quality at

economical price along with the convenience to consume. We deeply focus on non users,
potential users and first time users in readiness stage they are unaware, desirous,

55
interested and intending to buy. LAY’S is expecting the positive response from the
customers.

Product

LAY’S as an extruded item which lies in the snacks category is offered to market for
consumption and it is much satisfying the consumer’s needs and wants.

Levels of Products

For every product there are basically three levels of product.

Core Benefit

Before introducing the brand the LAY’S Company conduct different surveys to get the
perception of the consumer about features, design and quality level. Public want to buy
the potato chips to remove their hunger with little bit crunch and unique taste.

But mostly people are not ready to compromise on quality. In fact there is no any basic
necessity regarding snacks however it plays a vital role to fulfill that need.

Actual product

After a complete research LAY’S Company turns the core benefits into the actual
product and introduces the LAY’S CHIPS which is unique in Quality, Flavor, taste and
quantity. It’s totally fulfilling the need of the people.

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 Augmented Product

As we know that LAY’S is the convenience good at the consumer level so they are not
offering any services directly to consumer i.e. after sale service, user manual but they are
offering benefits to the retailers in the form of more profit. LAY’S stands etc.

Consumer Product

Consumer products are those products which consumer buy or purchase for their personal
use or consumption. So LAY’S are the consumer product because it basically use at the
consumer end.

Convenience Type of Product

LAY’S snacks is the Convenience type of product in which consumer buying behavior is
frequent purchase, little planning and little comparison and has a low price. And LAY’S
is believed on wide distribution channel.

Product Attributes

Quality

LAY’S CHIPS are following the concept of Siemens (Quality is when customer come
back and our product don’t) as far as the quality is concerned. They also not neglect the
two dimensions of quality (performance & conformance) to gain the satisfaction of
consumer.

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 Features

All the features (like spiciness) and characteristics of LAY’S is compiled by the company
on the need and want of the consumer.

Style & Design

Style and design matter a lot on the outcome and response of the product. LAY’S as the
product (inside the pack and out side wrapper) has much attractive and catchy colors style
and design which attracts the customers a lot.

Branding

The brand name came from India from a Hindi word Kurkura/Kurkuri means brittle
or crispy and to avoid that particular anti-patriotism they have decided to choose that
particular pack color.

• French Cheese

• Barbeque

• Masala

• Salted

With the time being this brand is so familiar so its capture the mind of every person as a
unique, quality, and tasty extruded with LAY’S Brand.

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Market of LAY’S

As far as the LAY’S is concerned with the market in which it deals is near to pure
competition but due to certain factors it lies in the monopolistic competition because
every company is charging the different prices according to their quality and product
features and as well as target market. Lay’s is charging comparatively high prices from
other ones in potato chips. And if we talk about the Pringles they serve the elite class with
quality and style that’s why they are getting too high prices which is not near to any
company which deals with snacks.

Pricing Strategies

The pricing strategy which is LAY’S is following, cannot be easily evaluate because
from company has not mentioned clearly about any system. However most of the
companies including this are following the Cost-Based Pricing. But a company cannot
follow a single strategy straightly because in the FMCG’s product market their will be
fluence of competitors based pricing along with a bit affect of customer value.

• It is already decided between kolson and Lays about their price strategy.
• They made the agreement that their prices will remain the same.
• They also decide the price of their packaging; they also set their strategy on Cost
+ Price.

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 • Their cost includes:
▪ Man Power
▪ Machinery
▪ Electricity
▪ Raw material
▪ Employees

Setting the right price is the most important thing, and Lays is doing well. Price is set by
keeping in view the quality of the product and the prices which are being offered by the
competitors.

Profit Maximization:
Pepsi has priced its products to achieve a certain percentage return on its sales. It has
settled the price of its products so that it can earns a net profit on its net sales.

Consumer Satisfaction:

There is a balance in consumer’s mind between the price they pay and the quality of the
product they purchase.

Affordable Price:

The price of Lays is affordable for middle level income groups. The price is adjusted
according to the demand of the product. When Lays Jumbo pack was launched, its price
was high as Rs. 25 now they reduced it @ Rs.20, causing an increase in demand of the
product.

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PROMOTION PLANNING

1. Advertising:

Lays advertises through various channels

▪ Media (Fm media, TV channels, Internet links etc.)
▪ News Papers & Magazines
▪ Billboards & Banners
▪ Sponsoring various Shows and Matches
▪ Free samples

2. Sales Promotion:

Lays made sale promotion in the following ways:

▪ By launching any new product like Aquafina they get sale promotion in their
business.
▪ When Lays lauched they offered a package of “Buy 2 and get 1 free”.
▪ When Mountain Dew was launched they offered free drinks to people to develope
the taste.
▪ They have a deal with KFC and Pizza Hut where they offer drinks to their
customers.
▪ They decrease their prices to increase the sales to capture the market.
▪ They also decrease their prices in winter too.

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 Recommendations

We recommend the company to start off with non-monetary reward system such as
acknowledgment and appreciation via notifying it to the department to motivate their
employees and boost their self-esteem. And gradually add standard monetary benefits
such as Provident fund, EOBI and insurance to the reward system this will not only
motivate employees but also retain them and create company loyalty which is a very
important element for a successful business. This all should be planned according to the
set criteria of Performance management system and each employee is awarded according
to delivery and efforts towards bringing business

Conclusion
Performance management is an ongoing process which takes a lot of
efforts from both sides and if it has no rewards or penalties attached to
it, this makes it just a hectic exercise meant for reporting only which
will make employees demotivated and loose interest in the business.
Therefore, Performance management system must have some
outcomes to run business efficiently and keep all the stakeholders on
board and interested.

Reference
The data of my internship report are collected from following places
• Lays pepsico fritolay
• www.pepsico.com.pk
• Human resource department
• Finance department
• Production and concern department
• internet

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