“ Market Survey Of PepsiCo Retailers On Merchandising Effectiveness”

Pepsi Co India Holding Ltd.

A Project Report on

“MARKET SURVEY OF PEPSICO RETAILERS ON DISPLAY
EFFECTIVENESS”
BY

GOVINDA BISWAS

1PI09MBA32
Submitted to

VISVESVARAYA TECHNLOGICAL UNIVERSITY,

BELGAUM
In partial fulfilment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION
Project work carried out at

PEPSICO INDIA HOLDING LIMITED, BANGALORE
Under the guidance of

Mr. MURALI MURTI UMA MOORTY

Professor, PESIT MBA Program Territory Development Manager

Bangalore PepsiCo – Bangalore City

Department of MBA

PES INSTITUTE OF TECHNOLOGY,
BANGALORE-560085
(2009-2011 Batch)

Department of MBA, PESIT, Bangalore Page 1


DECLARATION

I, GOVINDA BISWAS hereby declare that the summer project report titled “Market
Survey of PepsiCo Retailers On Display Effectiveness” written and submitted to
Visvesvaraya Technological University, Belgaum by me is my own and its equal copy has
not been reproduced to any other institution/ university or published anywhere else.

I understand that such reproducing is liable for punishment in any way the university deem
fit.

Place: Bangalore GOVINDA BISWAS

Date: USN :1PI09MBA32



ACKNOWLEDGEMENT
It is human bound duty to acknowledge those personalities who contribute immensely to his
efforts and guide him in the right decision in his ambitious endeavours.

I would like to take this opportunity to express my heartfelt gratitude to my guide professor
Murali Murti, PESIT, Bangalore who with his encouragement and co-operation helped me in
making this project a great success.

My sincere thanks to my parents and all the people who have helped me in making this report
successful. I would also thank my fellow students for their constructive criticism and valuable
information shared.

I would like to thank Territory Development Manager, PepsiCo, Bangalore Miss Uma Murthi
for having provided me an opportunity to undertake my project in his organization.

I would like to thank my guide at the company Mr. Sathya Swaroop for sharing his valuable
experience and knowledge.

Last but in no way the least, I wish to express my thanks to express my thanks to al my
thanks to all respondents who have co-operated in providing the necessary information for
the successful completion of the project.



EXECUTIVE SUMMARY
Beverage industry is one of the fast growing industries in India. It can be divided into 2
section i.e. carbonated & non-carbonated. The carbonated drink further classified into cola,
lemon, orange, mango & apple segments. Marketing includes all the activities like promotion,
distribution, advertising etc. To fulfil the all segment of consumers marketing is also to
convert social needs into profitable opportunities.

The project is - “Market Survey of PepsiCo Retailers on Display Effectiveness”

PepsiCo are facing problem regarding product availability in visi-cooler & display of the
product in the premises of the outlet. So as a result the sale of the product has not been
achieving the sales target set by the company.

So this topic provides the entire essential to theoretical knowledge & to inculcate the
efficiency. It also requirement for the company to improve their service & quality for
achieving their ultimate goal.

The topic has been given by the company to collect information about the current status of
the visi-cooler that is given by the company to the retailer for selling of every brand soft
drink of PepsiCo.

The main objective of the research was to know the company‟s position in the soft drink
market by doing visi-purity & charging of every visi-cooler.

This study covers survey of PepsiCo retailers on display effectiveness. During my study I
covered all the major areas of the Bangalore city. I surveyed around 100 retail outlets. This
study covers all the major dimensions considered essential for proper sales and
merchandising management. Some of them include sales support, trade scheme, profit
margin, effective service, providing signage boards etc. Coming out with new attractive
schemes and looking after the proper re-imbursement on trade schemes are very much
essential steps to be taken by PepsiCo. The retailer in the Bangalore city seems to be unhappy
with the support material provided by PepsiCo, which it has to look into immediately.
Company executives must try to build good relationship with the retailers by addressing their
problems continuously.



CONTENTS

PART-A
CHAPTER TOPIC PAGE NO.
1 INDUSTRY PROFILE

1.0 Soft drinks 1
1.1 Growth of soft drink industry in India 1-2
1.2 Overview of soft drink industry in India 2-3
1.3 Snapshot of soft drink industry in India 3
1.4 Future Prospect 4

2 COMPANY PROFILE
a) Background and inception of the company 5-10
b) Nature of business carried 11
c) Vision, mission & quality policy 11
d) Product profile 12
e) Area of operation 13
f) Ownership pattern 13
g) Competitor‟s information 13
h) Infrastructural facility 14
i) Achievement and award 14
j) Workflow model 15-16
k) Future growth and prospect 17
3 MCKINSEY’S 7S MODEL 18-36

4 SWOT ANALYSIS 37-38

5 ANALYSIS OF FINANCIAL STATEMENTS 39-40

6 LEARNING EXPERIENCE 41



PART-B

7 GENERAL INFORMATION
Statement of the problem 42
Objective of the study 42
Scope of the study 43
Methodology of the study 43-44
Limitation of the study 45
8 ANALYSIS, INTERPRETATION AND FINDINGS 46-60
9 CONCLUSION& RECOMMENDATION 61-62
10 ANNEXURE
11 BIBLIOGRAPHY 63



LIST OF TABLES
Table No. Chapter No. Description Page No.
5.1 5 Ratio analysis 39
8.1 8 Types of outlet visited 46
8.2 8 Most sold brand of PepsiCo 47
8.3 8 No. of times shortage faced by the retailers 48
8.4 8 Schemes which attracts the retailers 49
8.5 8 Status visi-charging on a average customer 50
visit
8.6 8 No. of crates sold per day 51
8.7 8 ANOVA test on impact of seasonal sales 52
and merchandising on actual sales
8.8 8 Chi-square test on relation between problem 53
sort out and brand satisfaction
8.9 8 Contingency coefficient test 53

8.10 8 Lamda test 54
8.11 8 Relationship between sales and independent 55
variables
8.12 8 Statistical significance (Wilks' Lambda test ) 56
8.13 8 Standardized Canonical Discriminant 57
Function Coefficients
8.14 8 Canonical Discriminant Function 57
Coefficients
8.15 8 Unstandardized coefficients 58



LIST OF GRAPHS
Graph No. Chapter No. Graph. Page No.
2.1 2 Work flow model 15

3.1 3 Mckinsey‟s 7S model 18
3.2 3 Organizational structure of 20
PepsiCo, Bangalore
3.3 3 Distribution system of PepsiCo 31
8.1 8 Types of outlet 46
8.2 8 Most sold of brand of PepsiCo 47
8.3 8 No. of time shortage faced 48
8.4 8 Types of schemes 49
8.5 8 Status of visi-charging 50
8.6 8 No of crates sell per day 51



LIST OF ANNEXURES
Annexure Description Page No.
A Financial Statements of PepsiCo, i
Bangalore
B Questionnaire for retailers iv



1.0 Soft drinks
Soft drinks is any a beverage that is not alcoholic or intoxicating and is usually carbonated
drinks. Although carbonation is not required, most people think of soft drinks as being
effervescent. A soft drink is a beverage, often carbonated, that does not contain alcohol.
Carbonated soft drinks are more commonly known as soda, pop, tonic or soda pop in parts of
the United States and Canada or fizzy drinks in the U.K; sometimes called mineral in Ireland.

1.1 Growth of soft drinks in india
The name “soft drinks” specifies a lack of alcohol by way of contrast to the term “hard
drink”. The term “drink”, while nominally neutral, often carries connotations of alcoholic
contents. A soft drink is a non- alcoholic beverage. It is artificially flavored and contains no
fruits or pulp.

India with population of more than 1billion is potentially one of the largest consumer markets
in the worlds after China. The consumer market can be defined as the market for product and
services that are purchased by individuals as household goods for their personal consumption.
A soft drinks is a typical consumer product purchased by individuals, first to quench thirst
and secondly for refreshment. Searching for the starting point of Indian soft drinks, let us first
document on Gold Spot, this was the first soft drink brand in India. It was introduced by
PARLE during later part of 40‟s.

Cola giant‟s Coca-Cola was the first foreign soft drink to be introduced in India in 1965,
Coca-Cola made a very good beginning and dominated the whole scene right from the word
go. It faced no competition at that time. Coca-Cola re-entered India in the year 1993 in
collaboration with PARLE INDIA LIMITED.

The marketing did not even need to publicize Coca-Cola for it sold first like hot cakes. This
extraordinary success of soft drinks can be attributed to the following factors –

 Absence of cotemporary competitive brand.
 Euphoric image built up in the Western countries preceded the entry into Indian
market.
 Indians are very fond of foreign goods, services etc due to prolonged foreign rule.

Parle Export Ltd, later in 1970 introduced Limca, Lemony Soft drinks, Pepino which they
had to soon withdraw in the face of confrontation with Coca-Cola.

Three of four groups of Indian companies who had the required production capacity started
their own production of Cola, lemon, orange, but failed to achieve their goal on a national
basis. India always have love and hate relationship with MNC‟S which gave significant
opportunities to soft drink industries in India when Coca-Cola decided to windup its
operation in 1977 rather than bowing to the Indian government insisting on :



 Dilution of equity, as the government felt that lots of foreign currency was being
wasted.
 Manufacturing of the top-secret concentration in India.
 Disclosing of the chemical composition of the essence.

This left a large vacuum in the popular soft drink market and a vista was opened to any
company with the requisite technical, marketing and organizational skill. The exit of Coca-
Cola from India in 1977 accelerated the growth of several Indian soft drinks. New soft drinks
in the form of tetra pack entered in the market; among them Frooti, Jump-In and Treetop
were the prominent once. Till 1977 their equipped bottling plants and the distribution
network a longing to be of no use. It took them one year to develop new formula to survive
and gradually came up with Campa, Lemon, Orange and Cola that order.

However Parle, the pioneer in the soft drinks, blazed its way to national prominence with
their product “Thumps Up‟‟ bearing the slogan “Happy Days Are Here Again‟‟. This
particular slogan helped to win over the loyalists or addicts to Coca-Cola, who was in the
state of “Cola Shock” or Cola Depression. Soon the Indian soft drink industry started at a
phenomenal rate and Parle products Gold Spot, Limca and Thumps Up became the brand
leader in their own segment.

In spite of these, the soft drink market still has a large gap, as claimed by soft drink
manufacturers. The Indian soft market basically offered three flavours i.e. Orange, Lemon
and Cola.

1.2 Overview of soft drink industry in India
The Indian soft drink beverage market is dominated by Coca-Cola India and PepsiCo. The
market had grown over the years to become the third largest consumer of beverages after the
US and China. The fact that the per capita consumption of soft drinks in India remained
among the lowest in the world added to the high growth potential of the market. Since the
1990‟s the market had witnessed many price, distribution and advertising wars between two
cola giants as they fought hard to grab a bigger share of market. The companies also had to
face allegations in 2004 and 2006 that their soft drinks contain high pesticide levels. With the
controversy behind it, both the companies were aggressively working towards increasing
their market share in India.

For a number of years the main competition in the non-alcoholic sector was the battle
between Coke and Pepsi for the cola market. But as the customer preferences and concerns
started to change, the industry‟s giants have relying on new product flavours and looking to
noncarbonated beverages for growth. Globally, the market size of this industry has been
changing. Soft drink consumption has a market share of 46.8% within the non-alcoholic drink
industry. Data monitor (2005) also found that the total market value of soft drinks reached
$307.2 billion in 2004 with a market value forecast of $367.1 billion in 2010.



Non-alcoholic drinks companies actually see India as a potential market because of kind of
summer India sees. The Coca-Cola Co reported its profit climbing up by 43% in the second
quarter of 2009 to two billion dollar, getting a boost from double digit unit case volume
growth. The Indian CSD (carbonated soft drinks) market stands at 1.2 billion dollar and the
fruit-based beverages and bottled water at 600 million dollar, respectively.

1.3 Snapshot of soft drink industry in India

1.3.1 Market size
Soft drink market size in Financial Year 2005 was around 270 million cases (6480 million
bottles). The market witnessed 5-6% growth in the early „90s.

1.3.2 Geographical distribution
The market preference is highly regional based. While Cola drinks have main market in
metro cities and northern states of UP, Punjab, Haryana etc. Orange flavoured drinks are
popular in southern states. Sodas too are sold largely in southern states besides sale through
bars. Western markets have preference towards mango-flavoured drinks.

1.3.3 Distribution network
The distribution network of Pepsi had 7.5 lakh outlets across the country in Financial Year
2008. On the other hand Coca Cola Company‟s distribution network had 8 lakh across the
country during Financial Year 2007.

1.3.4 Types of soft drinks
Soft drinks are available in glass bottles, tetra pack and PET bottle for home consumption.
Non –alcoholic soft drink beverage market can be divided into fruit drink and soft drinks.
Soft drinks can be further divided into carbonated and non-carbonated drinks. Cola, lemon
and oranges are carbonated drinks while mango drinks comes under noncarbonated category.

The market can also be segmented on the basis of types of products into cola products and
non-cola products. Cola products account for nearly 61-62% of the total soft drinks market.
The brands that fall in this category are Pepsi, Thumps Up, Coca-Cola, Diet Coke, Diet Pepsi
etc. Non-cola segment which constitutes 36% can be divided into 4 categories based on the
types of available, namely: Orange, Cloudy Lime, Clear Lime and Mango.



1.4 Future prospects
The government has adopted liberalized policies for the soft drink trade to give the industry a
boost and promote the Indian brands internationally. Although the import and manufacture of
international brand like Pepsi and Coke is enhanced in India, the local brands are being
stabilized by advertisements, good quality and low cost.

The soft drinks market till early 1990‟s was in the hands of domestic players like Campa,
Thumps Up, Limca etc but with opening up of economy and entry of MNC players Pepsi and
Coke the market has come totally under their control.

Although the beverage industry has been in existence for quite some time now, yet it is still at
an infant stage considering its size and place in the market. India stands at third number in the
consumption of the beverage, behind United States and China. It accounts for almost 10% of
global beverage consumption. Today, it is being looked as a country that offers the greatest
potential, even more so than China. This year, the beverage industry in India is being
estimated to grow at 17%.



PEPSICO INDIA HOLDING LIMITED, BANGALORE

A. BACKGROUND & INCEPTION OF THE COMPANY
PepsiCo entered India in 1989 and has grown to become the country‟s largest selling food
and Beverage Company. One of the largest multinational investors in the country, PepsiCo
has established a business which aims to serve the long term dynamic needs of consumers in
India.

PepsiCo nourishes consumers with a range of products from treats to healthy eats that deliver
joy as well as nutrition and always, good taste. PepsiCo India‟s expansive portfolio includes
iconic refreshment beverages Pepsi, 7 UP, Mirinda and Mountain Dew, in addition to low
calorie options such as Diet Pepsi, hydrating and nutritional beverages such as Aquafina
drinking water, isotonic sports drinks - Gatorade, Tropicana 100% fruit juices, and juice
based drinks – Tropicana Nectars, Tropicana Twister and Slice, non-carbonated beverage and
a new innovation Nimbooz by 7Up. Local brands – Lehar Evervess Soda, Dukes Lemonade
and Mangola add to the diverse range of brands.

The group has built an expansive beverage and food business. To support its operations,
PepsiCo has 36 bottling plants in India, of which 13 are company owned and 23 are
franchisee owned. In addition to this, PepsiCo‟s Frito Lay foods division has 3 state-of-the-
art plants. PepsiCo‟s business is based on its sustainability vision of making tomorrow better
than today. PepsiCo‟s commitment to living by this vision every day is visible in its
contribution to the country, consumers and farmers.

A Brief PepsiCo History In 1893, Caleb Bradham a young pharmacist from New Bern,
North Carolina, begins experimenting with many different soft drink
concoctions. Like many pharmacists at the turn of the century he had a
soda fountain in his drugstore, where he served his customers refreshing
drinks, that he created himself. His most popular beverage was something
he called "Brad's drink" made of carbonated water, sugar, vanilla, rare
oils, pepsin and cola nuts.

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



1898 - One of Caleb's formulations, known as "Brad's Drink," a combination of carbonated
water, sugar, vanilla, rare oils and cola nuts, is renamed "Pepsi-Cola" on August 28, 1898.
Pepsi-Cola receives its first logo.

1905 - Pepsi-Cola's first bottling franchises are established in Charlotte and Durham, North
Carolina. Pepsi receives its new logo, its first change since 1898.

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

1908 - Pepsi-Cola becomes one of the first companies to modernize delivery from horse
drawn carts to motor vehicles. Two hundred fifty bottlers in 24 states are under contract to
make and sell Pepsi-Cola.

1910 - The first Pepsi-Cola bottlers' convention is held in New
Bern, North Carolina.

1920 - Pepsi theme line speaks to the consumer with "Drink
Pepsi-Cola, it will satisfy you."

1928 - After five continuous losing years, Megargel
reorganizes his company as the National Pepsi-Cola
Company, becoming the fourth parent company to own the Pepsi trademark.

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

Caleb Bradham, the founder of Pepsi-Cola and "Brad's Drink," dies at 66 (May 27th,

1867-February 19th, 1934).

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

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



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

1941 - The New York Stock Exchange trades Pepsi's stock for the first time. In support of
the war effort, Pepsi's bottle crown colours change to red, white, and blue.

1942 - One on many company sponsored efforts to allow soldiers to communicate with
friends or family. This record was made in New York City but often booths would be set up
with mobile recording equipment that was bought to where the soldiers were. Shell material
on solid core. 78 rpm.

1943 - Pepsi's theme line becomes "Bigger Drink, Better Taste."

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

1950 - Alfred N. Steele becomes President and CEO of Pepsi-Cola. Mr. Steele's wife,
Hollywood movie star Joan Crawford, is instrumental in promoting the company's product
line.

1951-Pepsi receives its new logo, which incorporates the "bottle cap" look. The new logo is
the fifth in Pepsi history.

1953 - "The Light Refreshment" campaign capitalizes on a change in the product's formula
that reduces caloric content.

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

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

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

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



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

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

1965-Military 12-ounce cans are such a success that full-scale commercial distribution
begins.

Mountain Dew launches its first campaign, "Yahoo Mountain Dew...It'll tickle your innards."

1970 - Pepsi leads the way into metrics by introducing the industry's first two-litre bottles.
Pepsi is also the first company to respond to consumer preference with light-weight,
recyclable, plastic bottles. Vic Bonomo is named President of Pepsi-Cola. The Pepsi World
Headquarters moves from Manhattan to Purchase, NY.

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

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

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

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

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

1981 - PepsiCo and China reach agreement to manufacture soft drinks, with production
beginning next year.

1982 - Pepsi Free, a caffeine-free cola, is introduced nationwide. Pepsi Challenge activity
has penetrated 75% of the U.S. market.



1984 - Pepsi advertising takes a dramatic turn as Pepsi becomes "the choice of a New
Generation." Lemon Lime Slice, the first major soft drink with real fruit juice, is introduced,
creating a new soft drink category, "juice added." In subsequent line of extensions, Mandarin
Orange Slice goes on to become the number one orange soft drink in the U.S. Diet Pepsi is
reformulated with NutraSweet (aspertame) brand sweetener.

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

1987 - Pepsi-Cola President Roger Enrico is named President/CEO of PepsiCo Worldwide
Beverages. Pepsi-Cola World Headquarters moves from Purchase to Somers, New York.
After a 27 year absence, Pepsi returns to Broadway with the lighting of a spectacular new
neon sign in Times Square.

1988 - Craig Weatherup is appointed President/CEO of Pepsi-Cola Company.

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

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

1991 - Craig E. Weather up is named CEO of Pepsi-Cola North America, as Canada becomes
part of the company's North American operations. Pepsi introduces the first beverage bottles
containing recycled polyethylene terephthalate (or PET) into the marketplace. The
development marks the first time recycled plastic is used in direct contact with food in
packaging.



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

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

1994 - New advertising introducing Diet Pepsi's freshness dating initiative features Pepsi
CEO Craig Weatherup explaining the relationship between freshness and superior taste to
consumers. Pepsi Foods International and Pepsi-Cola International merge, creating the
PepsiCo Foods and Beverages Company.

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

1996 - In February of this year, Pepsi makes history once again, by launching one of the
most ambitious entertainment sites on the World Wide Web. Pepsi World eventually
surpasses all expectations, and becomes one of the most landed and copied, sites in this new
media, firmly establishing Pepsi's presence on the Internet.

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

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

1998 - Pepsi celebrates its 100th anniversary. PepsiCo Chairman and CEO Roger A. Enrico
donate his salary to provide scholarships for children of PepsiCo employees. Pepsi
introduces PepsiOne - the first one calorie drink without that diet taste!

2000 - Although Pepsi is a great place to work, Steven Truitt (aka 'struitt') takes his skills and
hard work elsewhere (for more money of course!), therefore putting an end to his Pepsi page!



For more information about Pepsi, choose a search engine and search for 'Pepsi' or visit
www.pepsi.com or www.pepsico.com.

2005 - Pepsi invited to introduce new brand cola

B. Nature of the business carried

PepsiCo is one of the world‟s largest food and beverage companies, with revenues of
nearly $60 billion. PepsiCo offers the world‟s largest portfolio of billion-dollar food
and beverage brands, including 19 different product lines that each generates more
than $1 billion in annual retail sales. Their main business - Frito-Lay, Quaker, Pepsi-
Cola, Tropicana and Gatorade – also make hundreds of other nourishing, tasty foods
and drinks that bring joy to their consumers in more than 200 countries.

PepsiCo‟s people are united by their unique commitment to sustainable growth, called
Performance with Purpose. PepsiCo dedicate themselves to offer a broad array of
choices for healthy, convenient and fun nourishment, reducing their environmental
impact, and fostering a diverse and inclusive workplace culture, PepsiCo balances
strong financial returns with giving back to our communities worldwide.

C. Vision, Mission & Quality Policy

Vision

“To build India‟s leading total beverage company, delighting consumers by best meeting
their everyday beverage needs, and stakeholders, by delivering performance with purpose,
through our talented people.”

Mission

"To be the world's premier consumer Products Company focussed on convenience food and
beverages. We seek to produce healthy financial rewards to investors as we provide
opportunities for growth and enrichment to our employees, our business partners and the
communities in which we operate. And in everything we do, we strive for honesty, fairness
and integrity."

Quality policy

“Make sale and deliver the beverage to the consumer as it was designed, in order to deliver
preference”. PepsiCo believes their success depend upon the quality and value of their
product by providing a safe, whole some, economically efficient and a healthy environment
for their customer. And by providing fair returns to their investors while maintaining the
standard of integrity.



D. Product profile

BEVERAGES
PepsiCo India‟s expansive portfolio includes iconic refreshment beverages Pepsi, 7UP,
Nimbooz, Mirinda, Slice and Mountain Dew; in addition to low calorie options such as Diet
Pepsi, hydrating and nutritional beverages such as Aquafina drinking water, isotonic sports
drinks - Gatorade, Tropicana 100%, Tropicana Twister fruit juices.

FOODS
PepsiCo's foods division Frito-Lay is the leader in the branded salty snack market and all it's
products are free of trans-fat. It manufactures Lay‟s Potato Chips; Cheetos extruded snacks,
Uncle Chips and traditional snacks under the Kurkure and Lehar brands. Company‟s high
fibre breakfast cereal, Quaker Oats and low fat and roasted snack options like Aliva enhance
the healthful choices available to consumers.



E. Area of operation

PepsiCo operates globally. The structure of PepsiCo's global operations has shifted multiple
times in its history as a result of international expansion, and as of 2010 it is separated into
four main divisions-PepsiCo Americas Foods, PepsiCo Americas Beverages, PepsiCo
Europe, and PepsiCo Asia, Middle East and Africa. As of 2009, 71 percent of the
company‟s net revenues came from North and South America, 16 percent from Europe and
13 percent from Asia, the Middle East and Africa.

F. Ownership pattern

The whole of the PepsiCo business has been classified in 3 ways around the world. They are
as follows:-

1. COBO- Company owned bottling operations.
2. FOBO- Franchise owned bottling operations.
3. JV- joint venture.

G. Competitors information

PepsiCo is facing the competition mainly by Coke. It has competition for all its products by
Coke.

Coca- Cola: It is a carbonated soft drink sold in stores, restaurants in more than 200
countries. It is produced by The Coca-Cola Company and is often referred to as simply Coke
or (in European and American countries) as Cola or Pop. Originally intended as a patent
medicine when invented in the late 19th century by John Stith Pemberton, Coca-Cola was
bought out by businessman Asa Griggs Cadler, whose marketing tactics led Coke to its
dominance of the world soft drinks market throughout the 20th century.

The Coca-Cola Company produces concentrate, which is then sold to various licensed Coca-
Cola bottlers throughout the world. The major Fight between the Pepsi and Coca-Cola
products is as follows.

For, Pepsi ---------- Coca-Cola

Slice ---------- Maaza

7-up ---------- Sprite

Mirinda ---------- Fanta

Nimbooz ---------- Limca



Pepsi Max ---------- Thumps Up

Aquafina ----------- Kinley Water

H. Infrastructural Facilities

PepsiCo India Holding Pvt Ltd is located at Walton Road, Lavelle Road, Bangalore. Its
manufacturing plant is situated at Kumbalgodu Industrial Area, Bengalore. The reason for
PepsiCo‟s success is its specially developed and well equipped infrastructure for
manufacturing process and quality assurance procedures. PepsiCo‟s manufacturing process
includes treatment of bottles through sophisticated technology. The plant has separate
machinery for treatment of water used in as an ingredient in the concentrate of PepsiCo. The
bottling plants include a godown for stocking all the raw materials, utility section for the
power generation and maintenance, warehouse for stocking all the raw materials, utility
section for the power generation and maintenance, warehouse for stocking all the finished
goods meant for shipping and office space. The company has suitable building for Production
and the Administration. The Production building also has Quality Control Department and
the Administration Building has different departments like Finance, Human Resource and
Sales. The other basic facilities available include Canteen facilities where tea, snacks and
meals are provided to the employees. PepsiCo has good rest rooms, parking and security
facilities for its employees.

I. Achievement / Award
PepsiCo takes pride in its achievements

PepsiCo in India is among 12 American companies selected as finalists for the
Secretary of State‟s prestigious 2010 Award for Corporate Excellence.

PepsiCo was recognized with a Asia region HR Star Award in 2006.

PepsiCo –Exnora waste management programme in Chennai wins
Environmental Golden Peacock Award for Innovation in 2006.

PepsiCo Palakkad plant won Golden Peacock National Award for a
Management in 2001 and 2002.

Award for Best HR Strategy in the line with business Pepsico India Holding
Pvt. Ltd (Frito Lays Division).

Award for Excellence in Training Pepsico India Holding Pvt. Ltd (Frito Lays
Division).

PepsiCo India has been recognized by ILO in their Annual Report as a model
partner for the HIV/AIDS program



J. Work flow model
( Figure 2.1 – Work flow model)

Raw Materials

Sweetening Agent

Syrup
Preparation

CO2 & Concentrates
Carbonation

Bottle Washing Filling Bottle

Effluent treatment plant Bottle Line Quality Assurance

Store

Raw materials

This is the first stage where all the raw materials are mixed as required by the products, like
in case of Slice – mango pulps, sugar, coloring agents etc. and in case of Pepsi the ingredients
like carbonated water, phosphoric acid, caffeine, citric acid and natural flavors. In this stage
the materials are just taken and inserted into the machine.



Syrup
In this second stage where the main concentrated syrup is prepared with the sweetening agent
(sugar). A syrup kind of mixture is formed which is ready for carbonated process. The
perpetration of the syrup is certainly is certainly one of the most important operation in the
beverage plant, both from the standpoint of sanitation and control of concentration. The
objective in syrup making is to prepare satisfactory bonded and finished syrup from which
uniform beverages of high quality can be produced.

CO2 and carbonation
In this process the prepared syrup will be put for the process known as carbonation. In this
carbonation process the liquid carbon dioxide is being added to the syrup. Then after this
carbonation process, concentrate is added to the products.

Bottling
Here from the other side the bottles come for filing after the process of cleaning which takes
place in the machine named “Tula”. Here the bottles are well cleaned by using the cleansing
agent called sodium carbonate.

The process of filling fir different products is done by different machines like for 7Up and all
kinds of soda filler the dynatorm fill up is used and hang machine for the Slice.

Here at a time two lines of bottle filling can be followed.

Slice – 7Up

7Up - Leher

Peps - Slice etc.

Quality assurance process

The process of picking of a sample for every half an hour is followed by quality check
department where the people of this department will be always be taking the samples from
the beginning of the process(i.e. from the first stage of adding raw materials) to the last stage
of bottling. Then the bottles are stored in the store room in crates. A crate consists of 24
bottles. At the time of bottle washing, waste water is taken to the effluent treatment plant,
where the water is treated with the reverse osmosis process for the purpose of purifying the
water.



K. Future growth and prospects

The Indian soft drinks market has been growing rapidly from 1 billion bottles in 1997
to about 9 billion bottles in 2010. India‟s middle class much larger than China.
Furthermore, many observers have predicted that India will eventually become an
economic giant, thus growing incomes should support more sales. The growth of the
Indian soft drink market is good but retaining market share is an uphill task.

To meet the increasing demand for soft drinks in Karnataka enhanced production
capacity will be installed.

The company is geared up to make all necessary changes as suggested by principal
technical and quality team to fall in line with the international brands of Pepsi Cola in
the Bangalore plant.

PepsiCo has also set its sights on the emerging health-awareness trend.

PepsiCo is giving immense importance to the emerging market such as India in its
long term growth strategy.

In order to give tough competition to Coca- Cola‟s most strongest brand Thumps-up,
PepsiCo is going to launch Pepsi Max in this year.

Windmill project will be undertaken to overcome the power shortage problems.



MCKINSEY’S 7S FRAMEWORK
Figure 3.1- Mckinsey‟s 7S model



The McKinsey’s 7s model states that:
There are seven basic dimensions, which represent the core of managerial activities. These
are the “Levels” which the executive use to influence complex and large organizations. There
was a concerned effort on the part of the originators of the model to coin the managerial
variables with cords beginning with the letter “S” so as to increase the communicator power
of the model.

Companies in which these soft elements are present are usually more successful in
implementation of the strategy.

Strategy – The direction and scope of the company over the long term.

Structure – The basic organization of the company, its department, reporting lines, areas of
expertise and responsibility (and how they inter-relate).

System - Formal and informal procedures that govern everyday activities concerning
everything from managerial information system, through to the systems at the point of
contact with the customer.

Skill - The capabilities and competencies that exist within the company and what it does
towards valued behavior.

Shared values – The values and belief of the company which ultimately guide towards
valued behavior.

Staff – the Company‟s people resources and how they are developed, trained and motivated.

Style – The leadership approach of top management and the company‟s overall operating
approach.



1. STRUCTURE OF THE ORGANIZATION
For the every concern a structure is necessary on which the complete organization should be
founded. The existence of a structure as obvious in every organization whether
planed/unplanned or ill planed. To have a structure is not a choice of the organizer. The
choice is only of the form and pattern of the organization. Planed organization structure may
be proved logical clear- cut and streamlined in order to meet the present requirement. The
Director look after all the functional department like production, sales, accounts, personnel,
purchase etc. Every department sends report directly to the director and are responsible to
him in sense of working. In spite of this all department are in direct control of the director.
Plant superintendent is the head of the production department. He looks after production, that
is bottling process, inspection, storage of new materials and though there is a quality control
manager. The controller of accounts heads the accounts department. Manager (Personal &
Administration) looks after the function of administration, industrial relation, legal jobs
security, welfare etc.
Chairman
Figure-3.2- Organizational structure

Of PepsiCo India Holding Ltd.
Managing
Director

Logistic Plant Personal Purchase Marketing Sales Finance
Dept. Mgmt. Dept. Dept. Depertment Department Dept.

Logistic Production Personal Purchase Marketing Territory Finance
Manager Manger Manager Manager Development Development Manager
Manager Manger

Personal Account
Staff Supervisors Supervisor
Officer Marketing Area Executive
Officer Development
Coordinator
Staff Staff Staff Accountant
Merchandiser
Customer
Executive
Security
Lab Store
Dept.
Pre sales
Representative

Store Delivery
Agent

Loader



The purchase officer is the in charge of all purchase activities of the Purchase-Shipping
department. The Manager (Equipment) is responsible for the distribution and maintenance of
visi-coolers.
The company follows narrow span of management. The chain of command starts from top
level management to middle level management and from middle level management to lower
level management. The authority and responsibility differs in each level of management

DEPARTMENTS

From the organisation structure shown above we can observe that the departmentalization is
done on the basis of standard functions of the management.

A. PERSONNEL DEPARTMENT
Personnel management department is responsible for offering service and coordination of the
different activities of various departments. It is again headed by the General Manager who is
assisted by an office manager. This is also includes an office secretary, a receptionist and
housekeeping assistants. This information flows from the higher superiority to the lower
subordinates

Objectives of Personnel Department:
Growth and satisfaction of the employees of the organization.
Maintain an organization climate conducive human growth, satisfaction and contribution.
 Create an environment for team work, and involvement of all personnel for achieving
company objective.

Recruitment It is the process of finding and attracting capable applicants for employment.
The process begins when new recruits are sought and ends when their application are submitted.
The result is a pool of applicants from which new employees are selected.

Purposes for recruitment:- The general purpose of recruitment is to provide a pool of
potentially qualified job candidates, specifically, the purposes are to:

1. Determine the present and future requirement of the Pepsico India Holding Ltd.in
conjunction with its personnel planning and job analysis.

2. Increase the pool of job candidates at minimum cost.

3. Meet the organization‟s legal and social obligation regarding the composition of its
workforce.

4. Begin identifying and preparing potential job application who will be appropriate
candidates.



5. Increased organizational and individual effectiveness in the short term and long term.

Recruitment Planning: The first stage in the recruitment process is planning. Planning
involves the translation of likely job vacancies and information about the nature of these jobs
into a set of objectives or targets that specify the (I) number and (ii) type of applicants to be
contacted. In order to reduce costs, organization looks into labour markets most likely to offer
the required job seekers.

Generally, Pepsico look in to the national market for managerial and professional employees,
regional or local markets for technical employees and local markets for clerical and blue-collar
employees.

1. Internal Recruitment: Internal recruitment seeks application for positions from
those who are currently employed. Internal sources include present employees, employee
referrals, former employees and former applicants. There is major advantage of internal
recruitment. First, it is less costly than external recruiting. Second, organization typically
has a better knowledge of the internal candidate‟s skill and abilities than the ones
acquired through external recruiting.
2. External Recruitment: External sources far outnumber the internal methods.
Specifically, sources external to an organization are professional or trade associations,
advertisements, college/ university/institute placement services, walk-ins and write-ins,
displaced persons, acquisitions and mergers, and competitors.

Generally in Pepsico the most common and least expensive approach for candidates is direct
applications, in which job seekers submit unsolicited application letters or resumes. Direct
applications can also provide a pool of potential employees to meet future needs.

Selection It is the process of picking individuals (out of the pool of job applicants) with
requisite qualifications and competence to fill jobs in the organizations. In Pepsico the main
medium of selection is Interview method. The applications received from job seekers would be
subjected to scrutiny so as to eliminate unqualified applicants. This is usually followed by a
preliminary interview the purpose of which is more or less the same as scrutiny of applications,
that is, elimination of unqualified applications. Scrutiny enables the HR specialists to eliminate
unqualified job seekers based on the information supplied in their application forms. Preliminary
interview, on the other hand, helps reject misfits for reasons, which did not appear in the
application forms. Interview has at least three objectives -(i) helps obtain additional information
from the applicant; (ii) facilitates giving general information to the applicant such as company
polices, job, products manufactured and the like ; and (iii) helps build the company‟s image
among the applicant.

Performance measurement The main Objective of performance appraisal of PEPSICO is
to effect promotions based on competence and performance, to confirm the service of
probationary employees upon their completing the probationary period satisfactorily. To improve



communication. Performance appraisal provides a format for dialogue between the superior and
the subordinate, and improves understanding of personal goals and concerns. This can also have
the effect of increasing the trust between the rater and ratee. The main method of performance
appraisal of PEPSICO is (i) attendance, (ii) self-expression (written or oral),(iii) ability to work
with other, (iv) leadership, (v) initiative , (vi) technical ability(job knowledge), (vii) ability to
understand new material, (viii) ability to reason, (ix) originality and resourcefulness, (x) areas of
work that suits the person best, (xi) judgment, (xii)integrity, (xiii) responsibility and , (xiv)and
defect- indebtness, memo served etc.

Industrial Relations:
The company has a very cordial atmosphere. It is mainly a people Focus Company than
engineering or technical oriented. It is informal during approach and formal during results.
The management and union have joined hands for the achievement of organizational
objectives.

Human Resources Development:
It deals with the overall improvement of each individuals, maximum utilization of human
resources selection, placement and training.
Amenities and Benefits scheme:
The company provides the following amenities and benefits to employees.
Incentives:
Incentives will be given to the employees on the basis of sales that made a difference from
one sale to another. 0.5% on profit for that sale will be given to the employees.
Provident fund:
It is a deposit as well as a pension oriented scheme to employees. The employees contribute
an equivalent amount for the same.
Leave with wages:
Every worker who has completed 240 working days or more in a calendar year is entitled to
get leave with Wages at the rate of one day for each 20 working days.

B. SALES DEPARTMENT –

ORGANISATION STRUCTURE OF SALES DEPARTMENT
TDM (territory development manager)
ADC (Area development Coordinator)
CE (Customer Executive)
PSR (Public Sales representatives)
DA (delivery agent)
The number of Customer Executives (CEs) and PSRs Public sales representatives (PSRs)
upon the size and structure of territory.

Function of sales department
1. Sales department is having the rounding system to every outlets in the local markets
everyday ( six days in a week ). In case the retailers are finished with the stocks they
can contact through phones then the stocks are send to them.



2. After collecting the order from the retailers the sales department orders the production
department to prepare the required stock to be sent on the mentioned date.
3. Details of the payment procedure, transportation procedure, delivery dates etc are also
handled by the sales department.
4. Sales team settles down the deal with the retailers and takes the invoice agreement
and then documentation process is carried.
5. The sales department sends the invoice copy to the shipping department which carries
the work of transforming the mentioned goods to the vehicle from the stock room and
inform back to the sales department with the acknowledgement.

The tools used by for fulfilling the various purposes of its sales promotional
activities are the following:-

 Point of sale display
 Dealer‟s sales contest
 Sales promotion through special event market
 Advertising
 Incentives
 Games

Point of Sale Display: A sensible man does not have to go far to find out whatever a
common panwala knows that people buy with their eyes. Every item on sale in a shop is
displayed in front where people can see it at first sight. It is the same with all the shops and
vendors in towns either selling consumer or selling soft drinks. Rather in selling a product like
PEPSI display is more than help, it is an essential element because soft drink is bought on
impulses on the spur of the movement. Thus the product is tested when it is brought at people‟s
attention.

Dealer’s sale contest: Another method of sales promotion being used by the PEPSICO,
through its distributors is to conduct dealer‟s sales contest during the peak seasons i.e. during
April to July. In it the dealers are given prize in the form of cases of soft drinks. In the contest at
first his or her respective distributors according to there categorize each dealer. And then each
distributor fixes a target of minimum sale for each category to which every dealer according to
his or her category has to achieve during the contest period. The dealers achieving highest sales
over and above the target set is giving the awards as under, the order of prizes announced are
first prize, 2nd prize, and 3rd prize in terms of number of free cases of soft drinks.



Special event market: The dealers at special event sports place the banners and stall of
Pepsi‟s product like picnic fates cricket test match, social events are also used to cater the
people. It helps in promoting the sale as well as in creating an image product.

Sales man contest: Sales man contest are held to motivate the sales man. Sales man
contest are held to motivate the sales man. Under the scheme salesmen are given monetary
incentive on the basis of sale made in their given route.

Media planning: A very important part of advertising is to decide the medium of
advertising and how much to spend in each media:-Newspaper & Magazines, Radio, TV,
Hoarding, Product of sales materials (paintings, glow signs, D. Board). Advertising is one of
the important factors which all put together results sales. It has to be backed by the
distribution network, effective servicing, dealer, goodwill and so on. Thus advertising has to
be very carefully woven with the entire demands of marketing.

C. MARKETING DEPARTMENT-
This department is responsible for all marketing aspects of retail operation. They are the one
who are mostly into all with the current and prospective customers. This department is
headed by a general manager who is assisted by 2 assistant managers who are in sales. They
are further assisted by a team of field sales executive.

D. SERVICES DEPARTMENT

This department is chained with the responsibility of maintaining service standards. they have
to customer satisfaction and after sales service, a long relationship with the customer. It is
again headed by General Manager, who is further assisted by the manager in charge of sales
and services. Here the main objective is to satisfy the customer. In each and every department
this service department plays a major role.

E. FINANCE DPARTMENT –

This department is responsible for preparation of all account aspects of the dealership and
retail operations. The Finance Department has the power to take any financial decisions like
allocation of budgets, approval of budget ,etc. It also prepare the budget and submits it to the
auditors. This department is under General Manager who is assisted by a finance manager.

Accountants, a cashier, and an EDP/Records officer again assist the finance manager.

The system followed in the finance department -
Raw materials purchased against the demand draft only.
99% of the purchases are in cash & carry system.



1% distributors support up to 10 lakhs credit bases.
For casual workers salary is paid on the cash basis.
For permanent workers salary will be transferred to their bank account.

Software used in the finance department - From 2005, company using the profit
(+) windows based software for the maintaining the financial records. Before this year
company used the profit software for its day to day operation.

Training in the finance department - In the finance department , on the job
training method is followed for the new employees. Along with the on the job training , the
company conducts some lecture type of training once in three months.

F. PRODUCTION DEPARTMENT -

Production department is one of the well knit department of PepsiCo. Production here is
highly reliant on the production planning. The PAC (Product Availability Coordinator) gives
the weekly plan. Logistics, manufacturing and quality control departments discuss the weekly
plan. These are given requisite jobs to be met and fulfilled. The logistics department has to
prepare full‟s and empty‟s report on daily basis. The quality assurance department is given a
plan for syrup making and like. Production planning is done in two days . Production
planning is done based on previous data. Based on the empty‟s and full‟s received,
production for the day is decided. The following departments manufacturing, logistics,
quality control , finance and purchase do production planning . Set strategies have to be
followed and specifications have to be adhered.

PRODUCTION PLANNING :
1. Distributor gives the demands to TDM‟s along with the cheques. TDM‟s will
consolidate the demand keeping in mind .

I. Cheque and
II. Returnable Glass (in case of glass bottle)

2. Demand for different territories is consolidated and given to PAC (Product
Availability Coordinator or managers).

3. PAC/PAM will check:

i. Glass in plant.
ii. Available stock.
iii. Production staff.
iv. Commit stock according to the present situation in plant
v. Ascertain how many glass bottles he will get back.



FORECASTING:
Forecasting is done using various tools such as:

Seasonality
Promotions
Discounts
Market activity

This forecast becomes a basis for the production planning.

G. PURCHASE DEPARTMENT
Stores and purchase is a department, which are system driven. This department is bound to
hoard the requisite raw materials, packaging materials and consumables. The raw materials
include caps, crown boxes and bottles. The packaging materials include labels and cartons.
The consumables that go into product include water treatment chemicals, syrup chemicals
and maintenance spares.

The entire stores and purchase departments based on SAP (System Application Protocol).
The Product Availability Coordinator (PAC) based on the inventory and bill defined in the
system undertakes Material Resource Planning (MRP). The system throws the net
requirement and purchase acquisition is made. The purchase order is noted on three factors:

Value of item purchased.
Value of item consumed.
Customer demand forecast.

The system controls the inventory and enumerates when the item should be purchased based
on the lead time.

This department is responsible for procuring the materials at the right time, right quantity for
the smooth functioning of the production using various methods. This method is also
responsible and controls the maintenance of materials, which it receives from suppliers.
Various means of transport are used for bringing the materials of the production process at
prompt delivery schedule.

FUNCTIONS OF PURCHASE MANAGER -
1. His main function is to ensure availability of resources.
2. He plans what are the materials to be purchased .
3. He is concerned with vendor management and development.
4. He does the procurement of materials .



5. He also does inventory management.

PURCHASE PROCEDURE – The company purchases materials on annual contract
basis. The company receives two weeks inventory in advance from the supplier. Supplier will
be aware of what is the requirement of the company for the next 3 months.

SHIPPING DEPARTMENT - It consists of a Manager. Executives and Labourers.
Their main functions are to ship and deliver the finished products in the various destinations.

MAINTENANCE DEPARTMENT – Maintenance Department is small department
which is primarily concerned with cleaning and maintaining the plant premises. It is basically
consists of unskilled workers whose job is to clean the plant on a regular basis and maintain
the lawns around the plant.

2. STRATEGY
Strategy is the choice of direction and the action the company adopts to achieve its objectives
in a competitive situation.

A strategy explains what are the objectives of the organisation and how the organisation go
about to achieve its objectives.

A. Ensure Sustainable, Profitable Growth in Beverages -

The merger with PepsiCo‟s anchor bottlers creates a lean, agile organization in India with an
optimized supply chain, a flexible go-to-market system and enhanced innovation
capabilities. When combined with the actions they are taking to refresh their brands across
the entire beverage category, PepsiCo believe this game-changing transaction will enable
them to accelerate their top-line growth and also improve profitability. PepsiCo continue to
see significant areas of global beverage growth, particularly in developing markets and in
evolving categories. They will invest in those attractive opportunities, concentrating in
geographies and categories in which they are the leader or a close second, or where the
competitive game remains wide open. Additionally, PepsiCo will use their R&D capabilities
to develop low- and zero-calorie beverages that taste great and add positive nutrition such as
fiber, vitamins and calcium.

B. Unleash the Power of "Power of One."-

PepsiCo is in the unique position to leverage two extraordinary consumer categories that have
special relevance to retailers across the globe. Their snacks and beverages are both high-
velocity categories; both generate retail traffic; both are very profitable; and both deliver
exceptional cash flow. The combination of snacks and beverages–with their high-demand
global and local brands–makes PepsiCo an essential partner for large-format as well as small-


format retailers. PepsiCo will increasingly use this portfolio and the high coincidence of
consumption of these products through integrated offerings (products, marketing and
merchandising) to create value for consumers and deliver greater top-line growth for retailers.
PepsiCo also will be accelerating Power of One supply chain and back-office synergies in
many regions to improve profitability and enhance customer service.

C. Rapidly Expand Our "Good-for-You" Portfolio -

PepsiCo currently has a roughly $10 billion core of "Good-for-You" products anchored by:
Tropicana and our other juice brands; Aquafina; Quaker Oats; Gatorade (for athletes); and
local "Good-for-You" products and brands. PepsiCo will build on this core with an increasing
stream of science-based innovation derived from the R&D capabilities that we have been
ramping up over the past couple of years, as well as from targeted acquisitions and joint
ventures. They will be investing to accelerate the growth of these platforms, and will use the
knowledge from these initiatives to improve our core snack and beverage offerings and also
to develop highly nutritious products for undernourished people across the country.

D. Continue to Deliver on Environmental Sustainability Goals and
Commitments -

PepsiCo are committed to protecting the Earth's natural resources and are well on their way
to meeting their public goals for meaningful reductions in water, electricity and fuel usage.
Their businesses around the country are implementing innovative approaches to be
significantly more efficient in the use of land, energy, water and packaging–and are actively
working with the communities in which PepsiCo operate to be responsive to their resource
needs. In 2009, PepsiCo formalized our commitment to water as a human right, and will
focus not only on world-class efficiency in their operations, but also on preserving water
resources and enabling access to safe water. PepsiCo‟s climate change focus is on reducing
our carbon footprint, including a reduction in absolute greenhouse gas emissions through
continued improvement in energy efficiency and the use of alternative energy sources.
PepsiCo actively work with their farmers to promote sustainable agriculture–and are
developing new packaging alternatives in both snacks and beverages to reduce our impact on
the environment.

E. Cherish PepsiCo Associates and Develop the Leadership to Sustain
Growth -
PepsiCo have an extraordinary talent base across their global organization–in their
manufacturing facilities, sales and distribution organizations, marketing groups, staff
functions and with their general managers. As PepsiCo expand their businesses, they are
placing heightened focus on ensuring that they maintain an inclusive environment and on
developing the careers of their associates–all with the goal of continuing to have the
leadership talent, capabilities and experience necessary to grow our businesses well into the
future. As an example, PepsiCo are implementing tailored training programs to provide
managers and senior executives with the strategic and leadership capabilities required in a
rapidly changing environment.



F. DISTRIBUTION STRATEGY -

PEPSI has very strong distribution system spread across the country. They have 4 plants
under COBO (Company Owned Bottling Operation) in places like Bangalore (Karnataka),
Chennai (TN),Pallakad (KERALA),Hydrabad (AP ) only to cater the need and supply of
South India.

G. PROMOTION STRATEGY –

Some of the top celebrities from the field of music and sports are used for promotions. PEPSI
offers discounts, commissions, online games, gifts, coupons, campaign on social networking
sites like facebook from time to time to push their product over competitor‟s product. A sales
Day is arranged once in a year which is called –CHALO BAZAR DAY where people from
across all functions in the organization go on a route ride and sell.

3. SYSTEM
System refers to the formal process and procedure used to manage the organization, including
the management control systems, performance measurement management system and record
system , performance measurement and reward system, planning ,budgeting, resource
allocation system, information system and distribution systems.

a. Sales forecasting system
In Pepsico there are 3-trritory development managers; having various areas will
forecast their area sales depending upon the previous year‟s sales.

b. Order receiving system
In order receiving system the customer executives will take a major part, they will go
to each distributor in various areas and take the order from the distributor. The
collected orders will shown to the area development coordinator. The area
development coordinators take that the crates will sent back to the plant.

c. Order execution system
When territory development manager receives order from different territory it will
send to the production department. The stock that is there in production department
will be loaded to the truck and order executed to the distributor of different areas.

d. Distribution system
There are two principle means to distribute the product from the production plant or
warehouse to the market place. In Pepsi cola marketing Ltd distribution takes place
through two types of channels. In Bangalore-city the type of channel is one level or
direct distribution system.



Fig- 3.3 – Distribution system f PepsiCo

PepsiCo’s Plant

Indenting

Primary Distributor
Sale

Secondary Sale
Market /
Retailers

Consumer

4. STYLE / CULTURE

Style refers to the flow of orders or method of communication in the organization PepsiCo is
following participative style where in subordinates and their heads will have discussion and
then they will take decision. Here in PepsiCo all middle level management employee make
discussion with their heads and make decision.

Organizational culture

The dominant values and beliefs, and norms develop overtime and become relatively
enduring features of organizational life.
Although branches of Pepsi Company has been situated in different places in world. But
company is following the same type of management practices, management concept and
principle and management theories.

Management style

Pepsi Company has focused on the best management style for promoting the sale of
products.



For example: Pepsi company has adopted “Walk The Talk” style of management,
where it will display new products to the general public and if accepted than they will
adopt the same style.
Democratic style is applied by the company‟s management for suggestions from
subordinates in the organization.
Even managers go along with the sales persons on the field work to catch the
customers.
All are closely like a family in the organization.

Leadership style
The Leadership style of managers of PepsiCo is of Consultative or Participative or
Democratic in nature.
The chief characteristics of this type of leadership are as follows:

1. The leader delegates as much responsibility to the members of the work team as their
experience and knowledge will permit.
2. He places emphasis on results rather than on action.
3. He shows concern for his employees and thereby gains their respect.
4. He encourages co-operation when it will lead to greater productivity and creativity.
5. He defines the objectives for the group and gives its members some freedom for
performance within the standards laid down by him.

Example - The team leader under whom I was doing my internship once assigned me the
responsibility to collect the id number printed on the cooler provided by the PepsiCo to the
retailers and the address proof of the retailers in the Kormangala area because many coolers
are gone missing in that area, he has made it clear that I have to collect all this information
within one day , but at the same time he was so co-operative that he has a assigned a sales
executive with me so that, that person can guide me while collecting these information. At
the same time he explained me what is the reason or main objective behind collecting these
information. I think this is one of the best examples of leadership style in PepsiCo.

Decision flow
In PepsiCo decision flow is top down. In which decision flows from the higher authority to
lower level. As the higher authority has a control over the decision will make the decisions
which will influence the function has to be followed an executed, administered and handled
by assistants.

5. SKILL
A skill refers to how smart an employee does his work with available sources. In
marketing and sales department various steps are taken for staff to develop appropriate
new skill for marketing their products.



a. Multi disciplinary skills

Production department some persons have the skill to operate bottle washing machine,
sealing machine and even some time they also handle small problems in machines. They
themselves identify the problem area of machine and make it repaired if required.

b. Single skill
Single skill refers to the only one skill with people. In PepsiCo only HR people and
chemist have single skill.

Skill classification in PepsiCo
In PepsiCo skill is mainly classified in marketing & sales department and engineering skills
in production department. in marketing department extra benefit will be given to the person
who achieve sales target. Every person in marketing department will be having respective
sales target.

Once in a year various steps are taken to impart various skills such a listening skill,
presentation skills to the customer executives.

6. STAFF
Staffs refer to the company human resources, which includes the manpower available in the
entire organization.

The company has divided its human resource into:

A. Technical staff
Company classifies employees working in production department
where many activities related to technical are done. Such as filling and making of pet bottle
section.

B. Non – Technical staff
Company also has non – technical staff in security
department, dispatch section and sales department (delivery agents and loaders).

C. Administrative staff
PepsiCo also have the staff to administrate the company.
Every department has the departmental head, which makes the decision in the company after
having discussion with the subordinates.

The company is recruiting skilled employees, in production section they are recruiting
well experienced and technically skilled persons, in marketing section they are



selecting only the M.B.A. graduates, apart from this their selection in middle level is
totally different, theyrecruit the IIM‟S Candidates.

The remunerations for the employees will be Rs.8000 to Rs. 10000; this is the starting
range it varies according to the posts.

The rewards & awards are based on the performance appraisal and are held once in a
sixmonth.

The compensation depends on the number of boxes sold by the employees.

7. SHARED VALUES
Shared values are the commonly held beliefs, mindsets and assumptions that shape how an
Organization behaves. An organization‟s main values are stated in its vision and mission
statements.
So, it is the responsibility of every employees of the organization to share these values, so
that every employee of the organization can give their best for the achievement of those
values.

PepsiCo‟s values reflect its aspirations – the kind of company PepsiCo want to be. PepsiCo
express its values in the form of its commitment.

Pepsico’s Commitment
PepsiCo‟s commitment is to deliver sustained growth, through empowered people, acting
with responsibility and building trust. Here‟s what this means:

Sustained Growth is fundamental to motivating and measuring PepsiCo‟s success.
PepsiCo quest for sustained growth stimulates innovation, places a value on results, and
helps them to understand whether today‟s actions will contribute to their future. It is
about growth of people and company performance. It prioritizes making a difference and
getting things done.

Empowered People means PepsiCo have the freedom to act and think in ways that
they feel will get the job done, while being consistent with the processes that ensure
proper governance and being mindful of the rest of the company‟s needs.

Responsibility and Trust form the foundation for healthy growth. It‟s about earning
the confidence that other people place in PepsiCo as individuals and as a company.
PepsiCo‟s responsibility means they take personal and corporate ownership for all they
do, to be good stewards of the resources entrusted to them. PepsiCo build trust between
themselves and others by walking the talk and being committed to succeeding together.



Guiding Principles:-
This is how they carry out their commitment.

PepsiCo must always strive to:-

Care for customers, consumers and the world they live in.
PepsiCo driven by an intense, competitive spirit in the marketplace, but they direct this
spirit toward solutions that achieve a win for each of their constituents as well as a win
for the corporation. Their success depends on a thorough understanding of their
customers, consumers and communities. Caring means going the extra mile. Essentially,
this is a spirit of growing rather than taking.

Sell only products PepsiCO can be proud of
The test of their standards is that they must be able to personally endorse their products
without reservation and consume them themselves. This principle extends to every part
of the business, from the purchasing of ingredients to the point where PepsiCo products
reach the consumer‟s hands.

Speak with truth and candor
PepsiCo speak up, telling the whole picture, not just what is convenient to achieving
individual goals. In addition to being clear, honest and accurate, PepsiCo take
responsibility to ensure their communications are understood.

Balance short term and long term
PepsiCo make decisions that hold both short-term and long-term risks and benefits in
balance over time. Without this balance, they cannot achieve the goal of sustainable
growth.

Win with diversity and inclusion
PepsiCo leverage a work environment that embraces people with diverse backgrounds,
traits and different ways of thinking. This leads to innovation, the ability to identify new
market opportunities, all of which helps develop new products and drives our ability to
sustain their commitments to growth through empowered people.

Respect others and succeed together
This company is built on individual excellence and personal accountability, but no one
can achieve their goals by acting alone. PepsiCo need great people who also have the
capability of working together, whether in structured teams or informal collaboration.
Mutual success is absolutely dependent on treating everyone who touches the business
with respect, inside and outside the company. A spirit of fun, their respect for others and



the value PepsiCo put on teamwork make us a company people enjoy being part of, and
this enables us to deliver world-class performance.

Example - In order to maintain a sustained growth PepsiCo always nurture the existing
talent in the organization through various training programme and performance appraisal.
While doing my project I have observed that PepsiCo had arranged various training
programme for different level of employee to make them proficient in various technical
and management skills. In January 2011 they have implemented the “SAMNA” system
in their company. That time they have made it compulsory that all the sales people
should be able to operate the SAMNA device properly in order to take order from the
retailer and to place the order to the manufacturing plant and to the distributor, that time
the company people though I was doing my project they made me to attend the training
programme so that I can also learn how to operate the system and treated me equally as
an employee.



SWOT ANALYSIS

PepsiCo is an American multinational corporation. The company is headquartered in
Purchase, York. PepsiCo was founded in 1965 through the merger of Pepsi-Cola and Frito-
Lay. Popular brands of PepsiCo are: Mountain Dew, Diet Pepsi, Lay‟s, Doritos, Tropicana,
Gatorade, and Quaker. Pepsi‟s products are available in some 200 countries. In 2010 the
company acquired its two largest bottlers, Pepsi Bottling Group and PepsiAmericas. SWOT
analysis of the company is given below:

Strengths

1. Pepsi is highly diversified company by having non-carbonated and carbonated beverages in
addition to sweet, salty and cereal-based snacks.
2. Pepsi Corporation has strong image all over the globe and possesses 5 diverse billion-dollar
brands.
3. PepsiCo has shaped partnerships with numerous brands in order to market and distribute
them with its own brands.
4. PepsiCo brands stand for quality and are appreciated household names.
5. Pepsi has more diversified portfolio in food and beverage related products as compared to the
Coca Cola.
6. PepsiCo mainly fights on differentiation, advertising and high market share.
7. PepsiCo has strong brand equity and greater number of loyal customer‟s around the world.
8. It has huge production and distribution facilities of beverages and food products.
9. PepsiCo has delivered solid operating and financial performance in current (2007-2009)
challenging global environment and generated significant operating cash flow such as:

a. Net sales grew 5% on a stable currency basis.
b. Main division operating profit rose 6% on a stable currency basis.
c. Operating cash flow, without few items, arrive at $5.6 billion, an increase of 16%.

Weaknesses

1. In 1993, PepsiCo had vast lines of discontinued products throughout the history which badly
damage the company‟s reputation..
2. PepsiCo directed to stave off a runaway fraud pertaining to supposed product tampering such
as:
a. Needles were declared to have been found in bottles and cans of Diet Pepsi.
b. Consumers accounted finding pins, screws and a bullet in their Diet Pepsi.



3. Overdependence on the markets of United States and Wal-Mart. For example the company
generates 52 percent of its sales from the U.S. and nearly 12 percent is generated by Wal-
Mart.
4. PepsiCo is too away Coca-cola in the international market place and demand for its products
is extremely elastic.

Opportunities

1. India is a promising market and one of the top five market places in provisions of growth of
soft drinks market.
2. The level of consumption in India is seen to increase with increasing household incomes.
3. Expand divisions with mergers and acquisitions for strong presence all over the world.
4. Invest in R&D to expand offerings of more reasonable, nutritionally related products for
lower-income and underserved communities.
5. The improving economic conditions globally after economic slowdown 2007-10.
6. Growing demand of juices products and health-conscious consumers and changing lifestyles.
7. Bottled water drinking is increased by 11 percent.
8. PepsiCo should offer the hygienic products due to increasing figure of health conscious
consumers.

Threats

1. PepsiCo and Coke have been main targets in India because they are familiar foreign firms.
This draws abundance of attention and strong criticism by different groups.
2. Improve or sustain brand equity figure for PepsiCo‟s $19 billion brands in top 10
marketplaces.
3. In this Industry Pepsi is fighting against increasing taxes on soft drinks.
4. Carbonated drink consumption have been decreasing due to involvement of lofty fructose and
sugar to obesity result to heart disease.
5. Many smaller players are furious competitors which are also creating the competition harsh.
6. Economic slowdown resulted in volatile commodity costs, fluctuating currencies, frozen
credit markets and negative GDP rates.
7. PepsiCo is facing strong regulations in different countries around the world.
8. Coca-Cola is the strong competitor which competes with strong advertising and
differentiation.
9. Numerous substitutes such as water, juices, coffee and beer etc are available to the end
consumers.



ANALYSIS OF FINANCIAL STATEMENT
Table 5.1 Ratio Analysis

S.NO RATIO TO BE FORMULAE YEAR AMOUNT ANS
CALCULATED
1 Current ratio Current assets 2010 12571000
Current liabilities 8756000 1.47

2009 10806000
8787000 1.22

2008 10151000
7753000 1.30

2 Gross profit ratio Gross profit 2010 23133000
Net sales 43232000 0.54

2009 22900000
43251000 0.53

2008 21436000
39474000 0.54

3 Net profit ratio Net profit after tax 2010 5946000
43232000 0.14
Net sales
2009 5142000
43251000 0.12

2008 5658000
39474000 0.14

4 Proprietary ratio Shareholder’s fund 2010 16908000 0.42
Total assets 39848000

2009 12203000 0.34
35994000

2008 17234000 0.49
34628000



5 Overall profitability Sales 43232000
ratio 2010 1.08
Total asset 39848000

43251000
2009 1.20
35994000

2008 39474000 1.14

34628000

INTERPRETATION OF RATIO ANALYSIS
1. The general rule of thumb for the current ratio is 2:1. The current assets are more than
current liability but it is not satisfactory.

2. The same consistency in gross profit ratio of 54%indicates that the firm is making
higher profits. Its operations are running effectively.

3. The net profit ratio of 14% in FY2010 indicates the firm‟s standard performance of
the business compared to previous two years.

4. The proprietary ratio indicates the extent to which tangible assets are financed by
owner‟s fund. The ratio will be 100% when there is no borrowing for purchasing of
assets. The increasing and decreasing trends in the ratio of PepsiCo from 2008 to
2010 indicates relatively unsecured position in the event of the concern.

5. The overall profitability ratio of 2 and above in the recent years indicates that the
company is efficient in its operations. But the company has less than 2 overall
profitability ratio.


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