report for mba project report

1. PROJECT REPORT
ON
A STUDY OF
“FACTOR INFLUENCING CHOICE OF SOFT DRINKS”
IN UDAIPUR CITY
SUMITTED IN PARTIAL FULFILLMENT FOR DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
YEAR: 2008
PACIFIC INSTITUTE OF MANAGEMENT
AFFILIATED TO
RAJASTHAN TECHNICAL UNIVERSITY
KOTA (RAJ.)
SUBMITTED BY GUIDED BY
DEEPAK KUMAR CHECHANI MISS. AMITA SINGVI
M.B.A SEM. IV
1

2. Preface
The beverages sector in India is one of the largest in terms of production,
consumption, export & growth prospects. These are two major sectors in the
beverages industry, i.e. Alcoholic Sector & Non Alcoholic Sector.
The purpose of this project is to find out the factors that affect the choice of
consumers when they purchase soft drinks (Non Alcoholic Beverages), the
brands preferred by the consumers for different flavors & about the
consumption pattern for different soft drinks.
Chapter one includes the introduction of the beverage industry framework of
India beverage industry & explains in detail about the non alcoholic
beverage sector.
Chapter two contains objectives of the research study & the research
methodology used for the project.
Chapter three also includes the analysis & interpretation of the research
study.
Chapter four has various finding, conclusion & suggestions.
2

3. Acknowledgement
Firstly, I thanks the all mighty by the grace of whom. This report was
undertaken and duly completed in time.
I take the opportunity to express my profound sense of gratitude and sincere
indebt ness to Miss. Amita Singvi, under sympathetic, pains taking, and kind
guidance of whom, I was able to complete this repot.
I am grateful to Director of our institute Dr. B.P.sharma who enabled me to
complete this report through their king guidance all the time.
I am very thank full to all the faculty member of the institute who helped me
a lot in it interpretation of date regarding my report without which this work
would never be completed.
I am also thankful to my parents who helped me morally and financially in
completion of this report.
3

4. Executive summary
Soft Drinks Bounces Back
After a somewhat subdued performance in 2006 due to a recurrence
of the pesticides controversy, soft drinks sales bounced back strongly to
record double-digit volume growth in 2007. With carbonates growth back on
a positive upward curve alongside burgeoning sales of fruit/vegetable juice
and bottles water, soft drinks showed impressive growth in 2007. Off-trade
volumes grew slightly faster than on-trade volumes, driven by higher
consumption of packaged and branded soft drinks at home and on the go.
The emergence of supermarkets/hypermarkets, heavy consumer promotions
and various new product launches played a key role in driving off-trade
volume growth.
Bottled Water and Fruit/vegetable Juice Continue to be Star Performers
Soft drinks sales in 2007 were propelled by bottled water and
fruit/vegetable juice with their healthier positioning helping to drive sales of
soft drinks. While carbonates posted single-digit growth in 2007, rebounding
from the pesticides controversy of 2006, it was bottled water and
fruit/vegetable juice that stormed ahead with high double-digit growth rates.
Poor municipal infrastructure for tap water has pushed sales of bulk
packaged water to households. Fruit/vegetable juice is growing as a result of
increased consumer expenditure on naturally healthy (NH) beverages. While
functional drinks and RTD tea also posted impressive growth in 2007, they
were growing from a very small base and are yet to achieve a critical mass
in terms of establishing a loyal consumer base.
4

5. Coca-Cola India and PepsiCo India slip in shares
With consumers showing a growing preference for healthier soft
drinks such as bottled water and fruit/vegetable juice rather than carbonates
in 2007, the two carbonates giants suffered a marginal decline in share.
Although both players embarked on a change in strategy to focus more on
non-carbonated soft drinks in their portfolios, they were unable to maintain
share and lost out slightly too home-grown players Parle Bisleri and Dabur
India. Coca-Cola India launched Minute Maid and pushed the sales of its
juices while PepsiCo India heavily promoted Tropicana, Aquafina and
Gatorade during 2007. In addition, Coca-Cola India and PepsiCo India
embarked on re-branding themselves as total beverage players and not just
carbonates players.
Booming Modern Retail Brings Many Opportunities for Soft Drinks
Players
With the retail scene in India undergoing a rapid metamorphosis with
the establishment of supermarkets/ hypermarkets and convenience stores,
soft drinks sales have benefited positively. People in urban areas are
increasingly flocking to supermarkets to pick up specialty items that are not
available in the kirana stores that are found all over India. Modern retail
outlets have provided soft drinks players with many opportunities to push
their brands. Consumer promotions for fruit/vegetable juice and emerging
sectors such as RTD tea and functional drinks are driving product sampling.
Attractive point-of-sale (PoS) displays and gift packs of concentrates are
also drawing consumer attention in supermarkets/hypermarkets.
5

6. Healthy Drinks to Drive Forecast Growth
Soft drinks is expected to post a strong performance on the back of
increasing affluence amongst consumers and evolving lifestyles which lead
to consumers devoting less time to preparing fresh food and drink at home.
Competition from the unorganized sector will diminish gradually as
consumers show greater aversion to buying unpackaged and unbranded
soft drinks from street vendors due to health and hygiene concerns. Rising
health consciousness is also expected to drive sales of naturally healthy
(NH) soft drinks such as 100% juice and mineral water. In addition, soft
drinks such as sports drinks and juice-based carbonates are also expected
to fare well over the forecast period as consumers perceive them to be
healthy.
Beverage Industry
EMERGING BEVERAGE TRENDS
The beverage industry is a shifting landscape as volume leading
categories such as soft drinks and beer continue to experience share
erosion while functional and health & wellness oriented categories enjoy
double-digit volume growth:
• Soft Drinks -3.9%
• Domestic Beer -1.2%
• Energy Drinks +53%
• Bottled Water +25%
• RTD Tea +23%
• Sports Drinks +19%
6

7. Industry giants Coca Cola (http://www.coke.com/) and Pepsi
(http://www.pepsico.com/) continue to diversify their portfolios, as evidenced
with Coke’s recent acquisitions involving Glaceau’s vitaminwater
(http://www.glaceau.com/) and Fuze (http://www.drinkfuze.com/), as well as
Pepsi’s purchase of Izze Natural Soda (http://www.izze.com/).
Functional beverages continue to be the hottest segment in beverage,
driven by energy drinks (+53% growth in 2006). Red Bull
(http://www.redbull.com/) continues to lead the category, but challengers
Monster (http://www.monsterenergy.com/) and Rockstar
(http://www.rockstar69.com/) are realizing share leadership in select
markets.
Bottled water is experiencing resurgence, +25% versus year ago, and is
second only to energy drinks in volume growth. Segment growth is driven
largely by the introduction of enhanced/fortified/flavored waters, led by
Glaceau’s vitaminwater but featuring a slew of new entrants including:
Metromint (http://www.metromint.com/), Hint (http://www.drinkhint.com/),
Propel Fitness Water (http://www.propelwater.com/), SoBe Lifewater (http://
www.sobelifewater.com/), Aquafina Alive (www.aquafina.com), among many
others.
RTD tea is riding the antioxidant wave to 23% volume growth versus prior
year, driven by consumers growing awareness of the health benefits
associated with antioxidants. Arizona (http://www.arizonabev.com/) leads
the category, followed by Lipton (http://www.lipton.com/) and Snapple (http://
www.snapple.com/) brands. Organic RTD tea brands are a growing market
niche led by Honest Tea (http://www.honesttea.com/) and Republic of Tea
(http://www.republicoftea.com/).
7

8. The “super-fruits” continue to capture the attention of health and wellness
enthusiasts, offering significant doses of antioxidants and other elements
that address myriad health concerns. Pom Wonderful
(http://www.pomwonderful.com/) led the super-fruit movement with its
pomegranate blends and unique packaging and merchandising. Bossa Nova
(http://www.bossausa.com/) and Sambazon (http://www.sambazon.com/)
feature the powerful Acai berry from South American rain forests.
Innovation continues to drive the beverage industry. Let Power Brands help
you bring your beverage brand to life!
8

9. CONTENTS
1) Preface…………………………………………………………..
2) Acknowledgement……………………………………………....
3) Executive Summary……………………………………………..
4) Introduction……………………………………………………..
5) Company Profile……………………………………………….
6) Research Methodology………………………………………...
7) Data Analysis & Interpretation………………………………..
8) Conclusion & Recommendations………………………………
9) Appendix……………………………………………………….
10) Bibliography……………………………………………………
9

10. PROJECT BACKGROUND
-
Beverage Market
10

11. The Indian Beverage Market
India’s one billion people, growing middle class, and low per capita
consumption of soft drinks made it a highly contested prize in the global
CSD market in the early twenty-first century. Ten percent of the country’s
population lived in urban areas or large cities and drank ten bottles of soda
per year while the vast remainder lived in rural an eras, villages, and small
towns where annual per capita consumption were less than four bottles.
Coke and Pepsi dominated the market and together had a consolidated
market share above 95%. While soft drinks were once considered products
only for the affluent, by 2003 91% of sales were made to the lower, middle
and upper middle classes. Soft drink sales in India grew 76% between 1998
and 2002, from 5,670 million bottles to over 10,000 million and were
expected to grow at least 10% per year through 2012.2 8 In spite of this
growth, annual per capita consumption was only 6 bottles versus 17 in
Pakistan, 73 in Thailand, 173 in the Philippines and 800 in the United States.
With its large population and low consumption, the rural market
represented a significant opportunity for penetration and a critical
battleground for market dominance. In 2001, Coca-Cola recognized that to
compete with traditional refreshments including lemon water, green coconut
water, fruit juices, tea, and lassi, competitive pricing was essential. In
response, Coke launched a smaller bottle priced at almost 50% of the
traditional package.
11

12. INDIAN HISTORY
India is home to one of the most ancient cultures in the world dating
back over 5000 years. At the beginning of the twenty-first century, twenty-
six different languages were spoken across India, 30% of the population
knew English, and greater than 40% were illiterate. At this time, the nation
was in the midst of great transition and the dichotomy between the old India
and the new was stark. Remnants of the caste system existed alongside the
world’s top engineering schools and growing metropolises as the historically
agricultural economy shifted into the services sector. In the process, India
had created the world’s largest middle class, second only to China.
A British colony since 1769 when the East India Company gained
control of all European trade in the nation, India gained its independence in
1947 under Mahatma Ghandi and his principles of non-violence and self-
reliance. In the decades that followed, self-reliance was taken to the
extreme as many Indians believed that economic independence was
necessary to be truly independent. As a result, the economy was
increasingly regulated and many sectors were restricted to the public
sector. This movement reached its peak in 1977 when the Janta party
government came to power and Coca-Cola was thrown out of the country.
In 1991, the first generation of economic reforms was introduced and
liberalization began.
STORY OF SOFT DRINKS
12

13. Segmentation of soft drinks:
The Soft drinks can be segmented on the basis of point of purchase
or on the basis of type of products. The story of soft drinks is fascinating,
since the beginning of life the most pressing needs of all living beings is food
& sweet juice when cut open, ditto the watermelon & fresh coconuts. Man
Learnt the Secrets of these Sources &used them as additional pleasant aid
drinks beside water. As year passed in thousands, man tried to imitate
nature in preparing these drinks so as to use them as well. As a result of
laborious Search in 1772, Joseph priestly combined carbon dioxide with
water & artificially produced arched water bubbling with gas spread quickly &
artificially produced arched water bubbling with gas spread quickly &
parched mouth begin to consume this.
The Segmentation on the basis of point of purchase divides the
market into two parts on premise 80% of the Consumption of Soft drinks is
done Premise i.e. restaurants, railway station, cinema hall etc.
At Home:
The rest of 20% of the market compromises of the soft drinks
purchased for consumption at home.
The market can also be segmented on the basis of products. The segment
could be as follows—
This account for 62% of the total soft drinks at all India level. The
brands that fall in this category are Pepsi, Thums up, Coke. Non-Cola
segment, which can be further, divided as orange. This segment has
19%share of the total market. Mirinda orange (of Pepsi) Fanta & and Gold
Spot (Both of Coke) & crush represent the orange segment.
Lime:
13

14. This segment represents 14% of the total market. Coke’s Limca
&Pepsi’s Mirinda fall in this category.
The market leader is close to 70% market share of this segment but
sprite has considerably cut into this market. Mango, Slice Mangola & Maza
is the leading Mango drink. Mango Drinks account for about 3% of the soft
drinks market. There is very thin line of difference between the clear &
cloudy lime. The most obvious feature is that clear lime has to be bottled in
green bottles as sunlight harms the drinks & change the taste.
14

15. THE INDIAN SOFT-DRINK INDUSTRY SCENARIO
Domestic firms in India, which once enjoyed the benefits of sheltered
markets, are increasingly facing competition from global giants in 1990s.
Sheltered market had once allowed Indian entrepreneurs to develop strong
brands that have held there own against the onslaught of the multinational
companies. Some domestic firms have chosen the strategy of tie-ups with
MNC’s. Others have tried to meet the competition head on.
Whatever route Indian firms take to deal with competition from MNC’s
it is imperative for them to keep track of global strategies of these firms.
Often the strategies undertaken at the local level are only part of the global
strategies, because it is difficult for any firm to allow significant differences in
approach in different markets.
Coca-Cola controlled the Indian market until 1977, when the Janta
Party beat the Congress party of then Prime Minister Indira Gandhi. To
punish Coca Cola’s principal bottler, a Congress party stalwart and long time
Gandhi supporter, the Janta government demanded that Coca Cola
transferred its syrup formula to an Indian subsidiary. Coca Cola backed and
withdrew from the country.
India now left without both Coca Cola and Pepsi became a protected
market. After Coca Cola made its exit from Indian market in1977, there was
a vacuum in the soft drink market, advantage was taken by Parle and Pure
drinks. Parley launched “Thumps Up” and gained a substantial and robust
market share.
In 1977 with a change in the government at the centre led to the exit
of coke, which preferred to quit rather than dilute its equity to 40% in
15

16. compliance with the provisions of FERA, the first national cola drink to
emerge was Double Seven. In the mean time, Pure Dinks, Delhi, on Coke’s
exit switched over to Campa Cola, and, by the end of 1970s, Campa Cola
was practically alone in the Cola market.
Parle introduced Thumps Up in the beginning of 1980s, followed by
thrill by McDowell’s and Double Cola by Double Cola manufacturing
Company (DCMC)-an NRI-run outfit with its plant at Nasik. An additional
dimension to the Indian soft drink industry was that of fruit drinks, which
were valued at Rs. 40 Crores and among the brands in the market, the
leader was Parle’s Fruity with about 40% of the market share. The other
players in this segment who have posed challenges to Parle are
Godreg(with Jumpin) and Ahemdabad bases Pioma Industries’ Rasna Cola-
Cola.
Setup in 1949, by 1978, Parle led the Indian soft drinks market with a
share of 33%. Gold Spot and Limca were the clear winners, and later,
Thumps Up also started contributing to its growth. Thus, Parley touched a
market share of around 60% in 1990. However, with the arrival of Pepsi,
Parle’s share decreased to 53% and Pepsi quickly attained a market share
of about 20 percent.
Till 1990, Parle’s chief rival was Pure Drinks, which was steadily
losing out to Parley. After the arrival of Pepsi, the market share of Pure
Drinks further deteriorated. This was mostly because Pure Drinks had
smaller number of bottling plants and a limited distribution network – exactly
the same reason why Pepsi could not do much against Parle. Parle had 60
bottlers against Pepsi’s 20 and 2.1 lakh retailers against Pepsi’s 1.5 Lakh.
Before 1992 , the Indian soft drink industry had not grown fast mostly
due to high excise duties and government encouragement of fruit drinks
16

17. over carbonated drinks. The Limca was largest selling brand of bottled soft
drinks in India, from consumers point of view ‘Cola’ was the most popular
flavor. It accounted for about 40 percent of the market. ‘Lime’ and ‘Lemon’
drinks followed with about 30 percent, and ‘Orange’ drinks had only about 20
percent of the market share. Carbonated soft drinks accounted for the rest
10 percent. From 1984 to 1992, the Rs, 1,200 Crore Indian soft drink
industry grew at an average of 2.5 to 3 percent, the highest being 12.4
percent during 1984-1985.
Pepsi had begun its efforts in mid 1980s but only in 1990 it was able
to make an entry in the Indian Cola market. In early 1985, the then
government rejected a proposal with RPG GROUP. This involved the export
of fruit juice concentrate from Punjab in return for the import of Cola
concentrate. The deal offered was a 3:1 EXIM ratio.
The revised proposal made by Pepsi also met lots of resistance. The
strongest opposition to the proposal came from the food and civil supplies
ministry, which argued that India should be promoting fruit juices, not
carbonated soft drinks. Opposition also came from CSIR, one of whose
laboratories developed its own soft drink flavors. After more than 5 years of
acrimonious battles Pepsi was finally launched in India in June 1990. To
obtain the license for India, Pepsi had to export $5 of locally made products
for every $1 of materials imported, and it had to agree to help the Indian
government to initiate a second agricultural revolution. Pepsi has also had to
take on Indian partners. Pepsi Co, Punjab Agro Industries Co-Operation
(PAIC) and Voltas promoted the project.
17

18. Pepsi had a very significant first mover advantage in the Indian
market. It did not have the condition of divestment of 49 per cent equity in
downstream ventures attached to it when it received permission to invest in
India. Pepsi had obtained the government approval for its downstream
ventures prior to the FD1 guidelines that made Indian equity holding
mandatory. Thus, in its original clearance, Pepsi was not only allowed to
hold 100 per cent equity .in its holding company but was also allowed to
carry out bottling and marketing operations.
The government approval, moreover, had allowed Pepsi to earn*
out acquisition of assets to expand its business in the country. Pepsi used
this clause in its approval to buy out 100 per cent stake in some of the
domestic bottling companies including its high profile buyout of Gujarat
Bottling Company, the former Coke franchisee in Ahmedabad. (Industry
ministry sources have clarified that while Pepsi would be required to seek
fresh government approval if it picks up shares in domestic bottling
companies as part of its portfolio investment, it does not need such
approval if the assets are acquired for expansion.)
There was now a triangular battle between Parle, Pepsi and Pure
Drinks. Pepsi launched 250 ml bottles in June 1990 to capture the 250 ml
bottle-market of Thums Up (launched in November 1989). As a response,
Thums Up ran ads downgrading Pepsi's taste and declared that it was a
fast drink. Thums Up entered the brand war totally with blind taste test ads.
Thums Up launched Double Maha Cola, the 500 ml bottle, to
prove that bigger is better in cola wars and was again first to introduce
'takeaway' 250 ml bottles for the first time in the Indian cola market. Pepsi
18

19. got into more trouble when six months after its launch it caught
government's attention regarding its commitments. Soon after, a show
cause notice was issued to the company for prima facie violation of the
conditions stipulated in the letter of intent with regard to the production of
soft drink concentrate.
Coca Cola came back to India after 16 years when it was
launched on October 24, 1993, at Agra. Coca-Cola was initially wooed by
the Godrej group, Great Eastern Shipping and the Britannia Industries Ltd, led
by Rajan Pillai. In March 1991, it signed an MOU (Memorandum of
Understanding) with BIL and this proposal was accepted by the
Chandrasekhar government. But relationship between the two companies
turned sour over the export-oriented clause and finally on June 23, 1993,
Coca Cola got the permission to enter the country with a 100 per cent
unit in India. On September 22. 1993, the company bought out the Parle
brands.
After the second coming, of the international varieties of Cola drinks,
the market has witnessed a high-profile tussle between the global giants -
Coca-Cola and PepsiCo. This tussle and the respective problems faced by
the two firms in the Indian market are extremely instinctive. PepsiCo
gained a significant first-mover advantage through its ability to gain early
access to the market. Coke, after a couple of abortive attempts, seemed
to have made an entry under ideal conditions in the market. However, it
then faced dissensions within the ranks of its bottlers. Its manner of
dealing with the bottlers seemed to lack Pepsi's finesse and India
seemed to be one of the rare markets where Pepsi was holding its
own against Coke and consolidating its position.
The companies have continued to wage their war in India. Coke,
with the strategic move of buying out Parle, gained a huge market share
19

20. overnight. Hut Pepsi is sparing no efforts to gain a larger share of the
market. The potential in the Indian market is tremendous. The Indian
market is roughly more than Rs 1,200 crore; moreover, the per capita
consumption of three bottles in India is lagging way behind the US's
astounding 700 bottles per capita consumption.
Both Coke and Pepsi have rightly realized that the immediate priority is
in expanding the market by increasing the growth rates. The Indian market
averaged a growth rate of 2.5 per cent between the years 1984-92.
From 1992, when the Cola war took a serious turn, the growth rate has
almost doubled. In 1995 the market grew by 20 per cent in volume term,
with estimated sales of 140 million cases (one case :- 24 bottles of 300 ml
each) up from 115 million cases in 1994.
The industry, prior to 1990, was witnessing sluggish growth rates
(CAGR: around 5 per cent) with two domestic players: Parle and Pure
Drinks. The entry of the cola giants, Coke and Pepsi, led to a rapid
expansion in the size of the market (CAGR for the first half of the 1990s:
around 20 per cent). Coke's acquisition of Parle has turned the market
into a duopoly. Also not only the market size is increasing, there is
also a shift of consumer preference between the different soft drink
segments. Whereas in 1990, cola was accounting for a third of all soft
drinks sold, today it accounts for well over a half.
20

21. COMPANY PROFILE
COMPANY PROFILE
21

22. In 1902 the Pepsi Cola Company was launched in the back room of
pharmacy and was applied in patent office for a trademark. The business
begins to grow on June 16, 1903 “Pepsi Cola” was officially registered with
the US patent office. That year Cola sold 7,968 gallons of syrup using them
in “exhilarating aids digestion”. It also awarded for franchised to bottle Pepsi
to independent investors, where number grew from just two in 1905 in cities
of charlotte and Durham, to 15 the following year, and 40 by 1907.
Gold Spot is considered as the first branded soft drink in India. It was
introduced by Parle in early forties. Coca-Cola was the first foreign soft drink
to be introduced in Indian markets. The Coca-Cola Company entered India
in the early fifties, when four bottling plants were setup at Bombay, Calcutta,
Delhi and Kanpur. Coca-Cola enjoyed a good beginning and dominated the
market. Parle exports private Ltd. the major domestic player later in 1970
introduced Limca, a lemon soft drink. Before Limca introduction, they had
attentively introduced ‘Cola Pepino’ which was soon with from the market.
In July 1977 Coca Cola left India following a public dispute over share
holding structure and import permits. As per FERA regulations the company
was required to indicate or clear operation. Coca-Cola left a big gap, which
was filled by several companies who came forward pushing different brands
in market.
Parle products introduced their cola “Thums Up”; pure drinks
introduced “Campa Cola” along with orange and lemon. Modern Bakeries
introduced “Double Seven” Thrill “Rush” and “Aprint”. At the same time
various regional soft brands played an independent role in their respective
territories like “Duke” and “Mangola” etc.
22

23. After Coke was asked to leave India Pepsi began to lay plans to enter
this huge market. Pepsi worked with an Indian business group in seeking
govt. approval for its entry over the objections of both domestic soft drink
companies and anti-multinational legislators, Pepsi saw the solution to lie in
making an offer that Indian Govt. would find hard to refuse. Pepsi offered to
help India export some of its agricultural products in a volume that would
cover more than the cost of importing soft drink concentrate. Pepsi also
promised to focus considerable selling efforts on rural areas to help their
economic development. Pepsi further offered to transfer food processing
packaging and water treatment to India in the way Pepsi started its
operations in April 1989 for beverages, snack food and export business. In
1990 first Pepsi, Cola was produced in India.
PepsiCo entered India in 1989 and in the span of a little more than a
decade, has grown to become the country's largest selling soft drinks
company. The Company has invested heavily in India making it one of the
largest multinational investors. The group has built an expansive beverage,
snack food and exports business and to support the operations are the
group's 39 bottling plants in India, of which 17 are company owned and 22
are franchisee owned.
PepsiCo stays committed to providing its consumers with top quality
beverages. Its diverse portfolio of brands include the flagship cola brand -
Pepsi; Diet Pepsi; 7Up; Mirinda; Mountain Dew; Slice fruit drink; Tropicana
brand 100% fruit juices in various flavors; Aquafina packaged drinking water;
Gatorade plus local brands Lehar Evervess Soda, Dukes Lemonade and
Mangola.
23

24. PepsiCo is also a dominant player in the snack food segment in India.
PepsiCo's snack food company Frito-Lay is the leader in the branded potato
chip market. It manufactures Lay's Potato Chips; Cheetos extruded snacks,
Uncle Chips; traditional namkeen snacks under the Kurkure and Lehar
brands; and Quaker Oats.
PepsiCo is one of the largest MNC exporters in India and its export
business consist of three categories - agri business, commodities and Pepsi
system sales. PepsiCo has made significant investments with the Punjab
Agriculture University to develop a comprehensive agro-technology
Programmed that has helped thousands of farmers across India improve the
yield of their farms and the quality of their agricultural products. PepsiCo has
leveraged its knowledge in contract farming to develop seaweed cultivation
in Tamil Nadu and has partnered with the Government of Punjab to help
farmers of the state through the utilization of developed technology for citrus
farming.
As part of its sustainable development initiatives, PepsiCo India has
been a committed leader in the promotion of rain water harvesting, water
conservation recycling and the reduction of effluent discharge. PepsiCo has
also established zero waste centers and PET recycling supply chains and
assisted victims of natural disasters. PepsiCo stays dedicated in its
endeavor to develop community outreach programs by supporting rural
water supply schemes, administering medical camps in villages, providing
computers to rural schools and creating opportunities for women in rural
areas through vocational training as an alternate means of livelihood.
PepsiCo India has worked closely with the Defense forces in
rehabilitation of Defense Personnel through projects like Mission Vijay-2.
24

25. Under this project Pepsi in association with Castrol helped soldiers set
booths in rural area to sell Pepsi and Castrol products there by helping them
to not only earn a decent living but to also add some color to their lives.
Through this project PepsiCo India also tries to give these soldiers
distribution rights for its soft drinks.
It gives PepsiCo India great pleasure in associating with Defense India and
Samvedna for an event to bring cheers and smiles for our Jawaans of BSF
(Border Security Force) at Wagah.
In the next year, 1991 production on Mirinda and 7 Up started. The
production of Slice, Teem and Fountain Pepsi started in 1993 Coca-Cola
came back again in October 1993 and launched in Agra. It joined hands with
Parle Export Pvt. Ltd. to enter India and gradually took over the same
company. The nineties also saw a new foreign entrant called Cadbury
Schmeppes, which rolled out Canada Dry and Crush in Metropolitan cities.
Pepsi entered the cloudy lemon category by launching its Mirinda
Lemon in 1998. In may 1999, a notification, presenting the presentation of
food Adulteration (Fourth Amendment) rules 1999, allowed the use of the
blended artificial sweeteners, as part time and a successful fame potassium
in the formulation of soft drinks, which in what made the entry of diet Pepsi
and diet coke. Coca-Cola also rolled out its popular clear lemon drink sprit in
India at same year, 1999.
25

26. What’s in Pepsi?
Pepsi contains:
Carbonated water, High fructose Glucose syrup/or Sugar color, Phosphoric
acid, Caffeine, Citric acid and natural flavors.
Calories 100
Total Fat (gm) 0
Sodium (mg) 25
Potassium (mg) 10
Total Carbohydrates (gm) 27
Sugars (gm) 27
Protein (gm) 0
Caffeine (mg) 25
26

27. COMPANY STRUCTURE
PepsiCo India Holding Ltd. is created by Pepsi Company, to carry out
the sales and marketing operation in India. Mr. Rajiv Bakshi, (G.M. business
unit), heads the Indian Unit. There are three marketing units in India East
and North, West and South. East & North units are headed by Mr. Prakash
Aiyer. Each marketing unit is subdivided into state units, and their state units
are divided into territories. Allahabad territory falls in U.P. unit of East and
North Marketing unit.
Company owned bottling operation (cobo) of U.P. unit comprises of
Share bottling plants at Sathariya (Jaunpur), Jainpur (Kanpur) and Bajpur
(Nainital) which supply to six territories at Allahabad, Gorakhpur, Kanpur,
Lucknow, Bareilly in U.P. and Uttranchal. This unit is headed by Mr. Saurabh
Gupta (Unit Manager); he is assisted by Mr.Harsh Rai, Marketing Manager.
The other staff in his office is finance controller, finance coordinator, MEM
Coordinator, Legal Advisor, Marketing Executive, Accounts Executive and
personal Executives.
Each territory is headed by territory Development Manager (TDM)
who is assisted by one or two Accounts Development Coordinators (ADC)
.The territory developments Manager (TDM) have a team of executives.
These executives are Customer executives, Service executives, and
Accounts executives. Executive working on Projects Mr. Rohan Arora is
Territory Development Manager (TDM) and Mr. Ajay Nagar is Accounts
Development Coordinator (ADC) of Allahabad Territory. The Customer
executive in this territory is Mr. Subodh Kumar, Mr. Devendra Singh. The
27

28. Customer Service Executives of this territory is Mr. Raghvendra and
Accounts executive is Mr. Neelkamal.
Allahabad territory is a big territory covering eastern districts of U.P.
as Allahabad, Varanasi, Mirzapur, Ghazipur, Sonebhadra, Pratapgarh,
Bhadoi, Kausambi, Jaunpur etc. There are 72 distributors in this territory.
The annual turnover of company in this territory was 3 million crore in
2004.The turnover of the company in India was 115 million crore in the same
year.
28

29. ORGANISATION CHART
Business Unit Manager (India)
MUM Marketing Unit Manager MUM
(West) (East & North)
(South)
Unit Manager
TDM TDM Territory Development Manager TDM TDM TDM
(Kanpur) (Lucknow) (Allahabad) (Gorakhpur) (Barreilly)
(Uttranchal)
Territory Traini Account
Development
Coordinator
CE CE CE CE CE CE CE (Jaunpur)
(Ghazipur) (Mirzapur) (Pratapgarh)(Bhadoi)(Kausambi)(Sonebhadra)
CE Customer Executive
(Varanasi) (Allahaabd)
29

30. PEPSICO HEAD QUARTERS
Pepsi co India world head Quarters is located in Purchase, N.Y.
approximately 45 minutes from New York City. Edward Darrel Stone, One of
Americas foremost architects, designed the seven-building headquarters
complex that includes the Donald M.Kendall Sculpture collection in a garden
setting.
The collection of works is focused on twentieth century & features
work by masters such as Auguste Rodin, Henri Laurens, Henry Moore,
Alexander Calder, Alberto Giacometti, Arnaldo Pamodoro & Claes
Oldenburg.
30

31. COMPANY’S GLOBAL STRATEGY
 Set a winner growth goals if you act like number two, you will always
be number two.
 Hiring people who love change and thrive on risk taking.
 Upset the rules of the market place. .
 Always anticipate the response you may provoke.
 Execution of a plan often derive success more then more marketing
 Encourage Executives to think laterally.
 Conjure Up those creative tactics to knack fizz out of its competition.
31

32. PEPSICO MISSION
We dedicate our efforts to-
 In India, only 40% people drinks soft drinks. So the main mission of
Pepsi is to capture the Rural Markets to make it a one-man show.
 Hiring & training ‘People’ who single handedly drive the business
forward.
 Providing courteous, prompt & efficient service to our customer.
 Building long-term prosperity of our brands in the market place.
 Exploring & developing opportunities that helps in building
competitive edges.
32

33. MARKET SIZE AND GROWTH RATE
The particular feature of market is that of positioning & targeting of
various brands while cola brand of Coke is targeted at teenagers & is
positioned as refreshment for mind & body. The Thums up brand is targeted
at people in age group & is positioned as fun drink.
Soft Drink market size for Fy00 was around 270mm cases (6480ml
bottle). The market, which was witnessing 5-6% growth in the early 1905 &
even slower growth at around 2-3% in the late 80s. Presently the market
growth has slowed down with growth rate of 7-8 per annum dawn with
growth rate of 7-8% per annum compared to 22% growth rate in the
previous year. The market size for Fy01 is expected to be 7000mmbottles.
The market growth of 22% till last year target still due to high excise duty of
40% leading to higher price of the end product. In terms of SKUS the market
is Skewed towards 300ml which constitutes around 80-85% of the market
rest in the form of other pack, Size, But with increasing occasion led & home
refrigeration led consumption the sales of bigger SKU’s like more than 1 liter
pack size has increased this has led to increase contribution from pet bottles
sales up to 75% are in Urban areas.
Another skew ness is in terms of the time of the year when the
consumption takes place. Sale of soft of Drinks takes place during summer
while just 5-6% of the total sales take place in the winter. In summer the high
season starts for 70-75 days, which contributes more than 50% of the total
year’s sales.
33

34. BRAND PROFILE
PepsiCo Company provides five brands of Soft drinks. In all brands of
Pepsi one is Soda, Second Mineral water and other are running successfully
in the market. At present time Pepsi provides two new soft drinks. Dew
Mountain and Blue Pepsi and above marketed with reasonably good
success. They are completely defined below-
1. Pepsi
2. Blue Pepsi
3. Pepsi Diet
4. Miranda (Lemon + Mango)
5. Slice
6. 7up
7. Aquafina
8. Dew Mountain
Now here we will discuss about the market shares of each brands of
soft drinks. There market share are as follows-
34

35. Soft Drinks Market Share
Pepsi 57%
Mirinda (Orange) 16%
Mirinda (Lemon) 2%
Slice 1.5%
Teem Soda Not Available
7UP 1.5%
Aquafina 3%
Blue Pepsi 2%
Dew Mountain 8%
Pepsi Diet 6%
Quantity Details of all brands of Soft drinks are given as below—
SOFT DRINKS Quantity
35

36. Pepsi
200ml, 300ml, 600ml, 1lt, 2lt.
Mirinda Orange
200ml, 300ml, 600ml, 1lt, 2lt
Mirinda Lemon
200ml, 300ml, 600ml, 1lt, 2lt
Slice
250ml, 500ml
7up
200ml, 300ml, 2lt
Teem Soda
300ml, 600ml
Pepsi Diet
330ml, 500ml
Aquafina
1lt
Dew mountain
200ml
Blue Pepsi
500ml
The PepsiCo company had provided its 300ml bottle soft
drinks(B.S.D.) in the month of June 95, 200ml launched in the year of 1999
and I lit, 1.5 lit bottle launched in the year 1996 while 500ml and 2 it
launched in 2000, Mineral water, Aquafina had been launched in the year
2001.
Dew mountain, Blue Pepsi 200ml, 500, ml, has been launched in the year
2003.
36

37. PEPSI DISTRIBUTION CHANNEL
Pepsi's main strategy is to operate franchisee (Franchisees owned
Bottling operation). Pepsi indulges mainly in direct contribution lo retailer
and resorts to indirect in certain areas. Pepsi distributes through three
channels which is shown below:
PEPSI BOTTLING PLANT
WAREHOUSE
FRANCHISEE DEALERS
RETAILERS
CONVENTIONAL NON-CONVENTIONAL
RETAILERS RETAILERS
There is no involvement of wholesalers in the distribution of products. It is
more like an agent network. The companies have divided the country into
various regions and established a franchisee in each region. The
franchisees have their own bottling plants and manage all the day to day
operations.
37

38. PACKAGING
Packaging plays a vital role in increasing decreasing in the sales of
the products. Thus, packaging of the product should be attractive and
product should be available in different sizes.
To keep in mind the importance of packaging PepsiCo and Coca cola
is adopting new technology for looking the products attractive and producing
the product in different size. The different pack sizes available are 200 ml,
300 ml, 330 ml (Can), 600 ml (promotional pack with 100 ml extra), I liters.,
1.5 liters., 2 liters., and 200 ml / 250 ml (slice).
RANGES OF DIFFERENT PACK AVAILABLE
1. GLASS – 200 ml, 300 ml, 1 liter and 250 ml.
2. PET - 500 ml, 600 ml, 1 liter and 2 liter.
3. TETRA - 200 ml (SLICE)
4. CANS - 330 ml
IN GLASS
• 24 Bottles * 200 ml = 1 Case
• 24 Bottles * 250 ml = 1 Case
• 24 Bottles * 300 ml = 1 Case
• 6 Bottles * 1000 ml = 1 Case
IN PET
• 24 Bottles * 500/600 ml = 1 cartoons
• 12 Bottles * 1000 ml = 1 cartoons
• 9 Bottles * 2000 ml = 1 cartoons
• 12 Bottles * 1500 ml = 1 cartoons
TETRA
• 24 Bottles * 200 ml = 1 Case
CANS
• 24 cans * 330 ml = 1 Case
38

39. ADVERTISING STRATEGIES ADOPTED BY AERATED SOFT DRINK
INDUSTRY
Soft drinks is perhaps the most hard fought product categories in
India in every respect - media, events, distribution, pricing, communication,
endorsements and so on... Every year it consistently emerges as one of the
top 10 categories on television. We, at AdEx India, have looked at year 2003
to understand the year that was for this exceptionally competitive segment!
One clear and predictable pattern in 2003 was the two clear peaks of
ad spend - one during the world cup and the other during the festive time.
Interestingly, while Pepsi dominated media budgets during World Cup,
Coca-Cola seems to have been the dominant spender in the month of
September.
However, this time we at AdEx thought of dwelling on aspects of
advertising in terms of strategy adopted by the different players in this
category and the duration of advertising across genres on TV and press.
This paper tries to throw some light on the following aspects: -
• Genre wise and channel wise composition of advertising on TV
• Advertising strategy adopted by the aerated soft drink players on TV
and press
• Zone wise and genre wise advertising on press
• Specific case: zone wise and genre wise advertising for Pepsi and
Coke
39

40. Genre wise analysis on aerated drinks establishes that this category is
heavily advertised on feature films, music, cricket and soaps. Major part of
the advertising on Cricket can be attributed to the fact that Pepsi was the
official sponsor of the Cricket World Cup 2003. However, apart from cricket
Pepsi is actively present on other types of sports such as soccer, wrestling
etc.
40

41. FIGHT FOR THE MARKET SHARES
With the cola majors busy sharpening their arsenal, it's a
pitched battle all the way -- whether on television or in the marketplace.
'
According to figures released by IMRB, in the month of January--
February, the combined market share of all carbonated soft drinks (CSD)
beverages under PepsiCo's domestic product portfolio - including Pepsi,
Mirinda Orange, Mirinda Lemon and 7 Up -- stands at 48.3 per cent. The
IMRB data adds that with the exception of Mirinda Lemon, all PepsiCo
beverages have led over Coca-Cola's brands in terms of market share in this
period.
However, when contacted by Business Line, Coca-Cola's official
spokesperson disagreed with these figures. According to ORG-MARG, which
tracks market figures for Coca-Cola India, the combined market share of all
Coca-Cola brands put together stands at 58 per cent. While declining to
provide individual market share of brands under the company's portfolio,
Coca Cola India's official spokesperson sa1d, "We do not agree with the
figures given by PepsiCo. If our turnover last year was almost double theirs,
how can their market shares be higher? The market shares they are stating
are obviously questionable."
Pepsi's official spokesperson reiterated that among colas, which
occupy close to 70 per cent of the approximately 270-millioncases CSD
market, Brand Pepsi's market share stands at 51 per cent. The combined
market shares of Coca-Cola and Thums Up stands at 49 per cent, according
to IMRB.
41

42. In the carbonated orange segment, which accounts for roughly 15 per
cent of the overall CSD market, the market share for Mirinda Orange has
been estimated at 53' per cent by IMRB. The market share of Coca-Cola's
Fanta brand is estimated at 47 per cent.
In the cloudy lemon segment, which accounts for roughly 10 per cent
of the CSD market, Coca-Cola's Limca brand leads PepsiCo's Mirinda
Lemon by a huge margin. Limca has a 75 per cent size of this segment,
while the share of Mirinda Lemon is 25 per cent. According to industry
estimates; the share of the cloudy lemon segment has slipped below that of
the orange segment. Interestingly, the cloudy lemon segment does not exist
in most developed markets, and is primarily a developing country
phenomenon.
42

43. PEPSICO: SOON TO HIT $ 1-BILLION MARK IN INDIA
PepsiCo will soon join the elite band of companies with $l-billion sales in
India. The company currently has sales of $700 million. Since 1989 the $27
-billion food and beverages giant has invested $700 million in India and seen a
steady double-digit growth in its volumes. The Indian operations are the Atlanta
based company’s: fifth largest outside the US now.
"We are on track to make it the second or third largest," Steve
Reinemund, chairman & CEO PepsiCo told the media in New Delhi.
Reinemund's visit was preceded by that of E Neville Isdell, chairman of the
board and CEO of The Coca Cola Company, who chose to visit India on taking
charge of Coke's global operations a few months ago.
Reinemund said PepsiCo's Rs5-per-packaffor_bility strategy initiated by
Coke and Pepsi had worked well in India and helped the company increase its
consumer base from 150 million to 250 million. He said with the strategy
PepsiCo had attained critical mass. "It is time now to increase the depth of
consumption," he says.
However, he admitted that the company was forced to hike its prices
recently as there was an affordability challenge all over the world. "We have
learnt this lesson and reverted to higher price points (in India) after having
achieved our objective of 150 million consumer footprints. We do not see any
depth in our future pricing and therefore, we have changed our strategy."
43

44. Pepsi Co is now making operating profits in India and its exports are
worth over $60 million, up from just $3 million in 1991. Reinemund was
especially upbeat about the company's snacks business Frito Lay, in India,
which he said was the fastest growing segment for five consecutive years. "India
is clearly one of our priority markets," he said.
Extolling Indian corporate talent, Reinemund said PepsiCo India was
being run without any expatriates and40 officials from the Indian operations had
so far been placed in the company's global businesses.” We are planning a
significant increase in our manpower exports from India," he said. He said
PepsiCo employed more than 4,000 people in India directly and over 60,000
indirectly with its concept of contract farmiJ1g in India. It has relationships with
over 2,000 farmers. The company introduced farmers in India to six high-yield
potato varieties and helped development of new seeds which helped increase
the total annual production of tomatoes from 28,000 tones to over 250,000 tones
in Punjab.
The company had no plans to make any structural changes in India said
Reinemund, since of the 37 bottling plants in the country, 17 company-owned
bottling plants accounted for 55 per cent of total production. He dismissed
reports that arch rival Coke was closing in on the sales of Pepsi products and
said Pepsi's leadership position was because Indians loved its products.
Reinemund met finance minister P Chidambaram and planning
commission deputy chairman Montek Singh Ahluwalia later in the day.
44

45. Sources said Reinemund was likely to discuss issues of future
investments and the high taxation policy of the government towards the soft
drinks industry and the overall fiscal environment with Chidambaram and other
senior government officials. Coca-Cola and PepsiCo have been urging the
government for lowering taxes, specially the special excise duty of eight per cent
levied on carbonated soft drinks.
This is Reinemund's first visit to India and signifies the increasing
importance of Indian operations for PepsiCo. India is now among the top eight
businesses of PepsiCo worldwide in terms of beverage and snack sales and
second only to China within Asia.
45

46. ADVERTISING AND PUBLICITY
PepsiCo is one of the biggest end spenders in India. It is also one of the
biggest global end spenders. It has a long list of endorsers from pop star
Ricky Martin to film star Sharukh Khan, Karina Kapoor, Pritey Jienta, Saif Ali
Khan, Fardin Khan and Amitabh Bachchan. Hindustan Thompson
Associates, the big guest advertising agency of India has the account of
PepsiCo, is known for its broad cast advertising but it also spends a lot in
non broad cast advertising i.e. hoarding, banners, poster, stickers,
specialties, hanger, dealer board, glow signboard, wall paintings and news
paper, the expenses of these type of advertising are made at territory or unit
level. Allahabad territory has assigned two local advertising agencies R. D.
Associates and Krishna for its territorial advertising.
46

47. Pepsi's Products
47

48. 48

49. COOLING FACILITIES AT OUTLET
The company has distributed 3,000 cooling approach at the outlet. The
company has purchased these coolers from six different companies out of
which few also provide maintained services. The companies are Alywn, Carrier,
Kelvinator, Konark & Helchama.
In India 80% soft drink is consumed at the outlets &the rest 20% is
consumed at homes, this requires the soft drink manufacturer to provide
adequate cooling facilities at the outlet’s to make the soft drinks, ready to serve
to the consumer. Pepsi Company wants to serve its customers with finished
products. The company supplies final product to the retailers & it is retail outlet
where the product is transformed into finished product. While serving the chilled
soft drinks to customer, so the chilled Pepsi available at the retail outlets is the
finished product.
The company has also installed deep freezers models of 100lt, 250lt
&1000lt. This cooling equipment is the property of the company, which are
installed at outlets to serve the customer. They are in stalled at those outlets,
which have a deposit of 12 crates of empties upon each 10 liter capacity of the
order & a potential of selling four carats annually on each Liter capacity of the
cooler. The retailers are required to keep only PepsiCo product in these coolers.
The capacity of coolers varies from 65 liters to 330 liters. Most of the
models have a transparent door, which makes the product visible. These
models are called VISI coolers.
49

50. 50

51. MARKETING SCHEMES
For increasing the market share and beating the competitors company
provides different schemes on different time. The schemes are of two types one
for Consumers and other for retailers. During my training period two types of
consumer schemes and two types of retailer schemes were going on.
1. Free Flavors, To Retailers:
Company offers few bottle flavors free to retailers on purchase of one
carat of flavor on some specific days. The free flavors scheme varies from one
bottle to many bottles.
2. Display Rack Scheme:
This scheme is only for retailers. In this scheme company provides a
Pepsi rack to retailer. The rack is filled with different bottles of Pepsi. The
retailers are instructed that if they will maintain their racks in the same condition
as it was when it was purchased. After completion of one-month different gift
packs are distributed to the retailers.
3. Hai Koi Jawab:
This scheme was launched on 300ml bottle of Pepsi. This is U.T.C.
scheme meaning Under the Crown. In this scheme some number are given
under the bottle of Pepsi and company announces some lucky number. If this
number is matched with the number under the crown number then the owner of
that bottle wins different cash prizes.
4. Miranda U.T.C:
This scheme was launched on 300ml bottle of Miranda. This is U.T.C.
Scheme meaning under the crown. In this scheme some dollar amount is given
under the bottle and the consumer may collect these dollars and add it.
Company provided different gift packs on different crown number.
Their schemes are offered by the company to maintain the competition at it is
offered on those days when Coca-Cola offers any similar scheme.
51

52. 4 P’S
4 P’s is the main features that directly affect the organization without 4
P’s organization is not able to produce the product. 4 P’s represent the main
features of product. Many possibilities can be collected into four groups of
Variables know as “Four Ps” i.e. product, price, place, promotion.
Product: -
Product means the good and service combination of the company
offered to the target market. Company changes the sizes, variety, flavor brand
name of the product after one or two year.
Price: -
Price is the amount of money which customers have to pay to obtain the
product calculates suggested retails prices that its dealers might charge for
sources. But dealers rarely charge the full sticker price.
Place: -
They are mostly available in al place but easily available in the Urban
Market but not frequently found in Rural Market.
Promotion: -
Promotion means activities that communicate the merit of the product
and persuade target customers to buy it. The measurement factor to promote
the Pepsi product is to increase good transportation in rural market. If the Pepsi
is available to capture the rural market then it is certain that it will occupy first
position of soft drinks industry.
52

53. Product Price
 Product Variety  List Price
 Quality – Sizes  Discounts
 Features – Services  Allowances
 Brand Name –  Payment Period
Warranties  Creditors
 Packaging- Returns
Target
Customers
Intended
Positional
Place Promotion
 Advertising  Channels
 Personal Setting  Coverage
 Sales Promotion  Assortments
 Public Relations  Locations Logistic
 Inventory
 Transportation
53

54. The Coca-Cola Company
One Coca-Cola Plaza
Atlanta, GA 30313
Phone: 404-676-2121
Fax: 404-515-5997
Web Site: http://www.cocacola.com/
DETAILS
Dow Jones Composite
Dow Industrials
Index Membership: S&P 100
S&P 500
S&P 1500 Super Comp
Sector: Consumer Goods
Industry: Beverages - Soft Drinks
Employees (last reported count): 92,400
OFFICERS
Pay Exercised
Mr. Muhtar Kent ,
$ 5.60M
58 Chief Exec. Officer, Pres, Director and Member of $0
Exec. Committee
Mr. Gary P. Fayard ,
$ 1.83M $0
56 Chief Financial Officers and Exec. VP
Mr. Alexander B. Cummings Jr.,
52 Chief Admin. Officer, Exec. VP, Pres of Africa $ 1.59M $0
Group and Chief Operating Officer of Africa Group
Mr. José Octavio Reyes ,
56 Pres of Latin America and Chief Operating Officer $ 1.86M $0
of Latin America
Mr. Irial Finan ,
51 Exec. VP and Pres of Bottling Investments & $ 2.13M $0
Supply Chain
Dollar amounts are as of 31-Dec-08 and compensation values are for the last fiscal
year ending on that date. "Pay" is salary, bonuses, etc. "Exercised" is the value of
options exercised during the fiscal year.
54

55. REUTERS ABRIDGED BUSINESS SUMMARY
The Coca-Cola Company manufactures, distributes, and markets
nonalcoholic beverage concentrates and syrups worldwide. It principally offers
sparkling and still beverages. The company’s sparkling beverages include
nonalcoholic ready-to-drink beverages with carbonation, such as energy drinks,
and carbonated waters and flavored waters. Its still beverages consist of
nonalcoholic beverages without carbonation, including non-carbonated waters,
flavored waters and enhanced waters, juices and juice drinks, teas, coffees, and
sports drinks. The Coca-Cola Company also offers fountain syrups, syrups, and
concentrates, such as flavoring ingredients and sweeteners. The company
markets its nonalcoholic beverages under the Coca-Cola, Diet Coke, Fanta, and
Sprite brand names. The Coca-Cola Company also owns mineral water brands
Kildevaeld and Kurvand in Denmark and soft drink brand Hyvaa Paivaa in
Finland. It sells its finished beverage products primarily to distributors, and
beverage concentrates and syrups to bottling and canning operators,
distributors, fountain wholesalers, and fountain retailers. The company was
founded in 1886 and is headquartered in Atlanta, Georgia.
55

56. COKE IN INDIA
Coca-Cola was the leading soft drink brand in India until 1977 when it
left rather than reveals its formula to the government and reduces its equity
stake as required under the Foreign Exchange Regulation Act (FERA) which
governed the operations of foreign companies in India. After a 16-year
absence, Coca-Cola returned to India in 1993, cementing its presence with a
deal that gave Coca-Cola ownership of the nation's top soft-drink brands and
bottling network. Coke’s acquisition of local popular Indian brands including
Thums Up (the most trusted brand in India2 1), Limca, Maaza, Citra and Gold
Spot provided not only physical manufacturing, bottling, and distribution assets
but also strong consumer preference. This combination of local and global
brands enabled Coca-Cola to exploit the benefits of global branding and global
trends in tastes while also tapping into traditional domestic markets. Leading
Indian brands joined the Company's international family of brands, including
Coca-Cola, diet Coke, Sprite and Fanta, plus the Schweppes product range. In
2000, the company launched the Kinley water brand and in 2001, Shock
energy drink and the powdered concentrate Sunfill hit the market.
From 1993 to 2003, Coca-Cola invested more than US$1 billion in India,
making it one of the country’s top international investors.22 by 2003, Coca-
Cola India had won the prestigious Woodruf Cup from among 22 divisions of
the Company based on three broad parameters of volume, profitability, and
quality. Coca-Cola India achieved 39% volume growth in 2002 while the
industry grew 23% nationally and the Company reached break-even
profitability in the region for the first time.2 3 Encouraged by its 2002
performance, Coca-Cola India announced plans to double its capacity at an
investment of $125 million (Rs. 750 crore) between September 2002 and
March 2003.
56

57. Coca-Cola India produced its beverages with 7,000 local employees at
its twenty-seven wholly-owned bottling operations supplemented by seventeen
franchisee-owned bottling operations and a network of twenty-nine contract-
packers to manufacture a range of products for the company. The complete
manufacturing process had a documented quality control and assurance
program including over 400 tests performed throughout the process.
The complexity of the consumer soft drink market demanded a
distribution process to support 700,000 retail outlets serviced by a fleet that
includes 10-ton trucks, open-bay three wheelers, and trademarked tricycles
and pushcarts that were used to navigate the narrow alleyways of the cities.25
In addition to its own employees, Coke indirectly created employment for
another 125,000 Indians through its procurement, supply, and distribution
networks.
Sanjiv Gupta, President and CEO of Coca-Cola India, joined Coke in
1997 as Vice President, Marketing and was instrumental to the company’s
success in developing a brand relevant to the Indian consumer and in tapping
India’s vast rural market potential. Following his marketing responsibilities,
Gupta served as Head of Operations for Company-owned bottling operations
and then as Deputy President. Seen as the driving force behind recent
successful forays into packaged drinking water, powdered drinks, and ready-
to-serve tea and coffee, Gupta and his marketing prowess were critical to the
continued growth of the Company.
HISTORY OF COKE
57

58. The Early Days
Coca-Cola was created in 1886 by John Pemberton, a pharmacist in
Atlanta, Georgia, who sold the syrup mixed with fountain water as a potion for
mental and physical disorders. The formula changed hands three more times
before Asa D. Candler added carbonation and by 2003, Coca-Cola was the
world’s largest manufacturer, marketer, and distributor of nonalcoholic
beverage concentrates and syrups, with more than 400 widely recognized
beverage brands in its portfolio. With the bubbles making the difference, Coca-
Cola was registered as a trademark in 1887 and by 1895, was being sold in
every state and territory in the United States. In 1899, it franchised its bottling
operations in the U.S., growing quickly to reach 370 franchisees by 1910.10
Headquartered in Atlanta with divisions and local operations in over 200
countries worldwide, Coca-Cola generated more than 70% of its income
outside the United States by
2003.
International expansion
Coke’s first international bottling plants opened in 1906 in Canada,
Cuba, and Panama.11 By the end of the 1920’s Coca-Cola was bottled in
twenty-seven countries throughout the world and available in fifty-one more. In
spite of this reach, volume was low, quality inconsistent, and effective
advertising a challenge with language, culture, and government regulation all
serving as barriers. Former CEO Robert Woodruff’s insistence that Coca-Cola
wouldn’t buffer the stigma of being an intrusive American product,58 and
instead would use local bottles, caps, machinery, trucks, and personnel
contributed to Coke’s challenges as well with a lack of standard processes
and training degrading quality.
58

59. Coca-Cola continued working for over 80 years on Woodruff’s goal: to
make Coke available wherever and whenever consumers wanted it, an arm’s
reach of desire. The Second World War proved to be the stimulus Coca-Cola
needed to build effective capabilities around the world and achieve dominant
global market share. Woodruff’s patriotic commitment that every man in
uniform gets a bottle of Coca-Cola for five cents, wherever he is and at
whatever cost to our company was more than just great public relations. As a
result of Coke’s status as a military supplier, Coca-Cola was exempt from
sugar rationing and also received government subsidies to build bottling plants
around the world to serve.
Turn of the Century Growth Imperative
The 1990’s brought a slowdown in sales growth for the Carbonated Soft
Drink (CSD) industry in the United States, achieving only 0.2% growth by 2000
(just under 10 billion cases) in contrast to the 5-7% annual growth experienced
during the 1980’s. While per capita consumption throughout the world was a
fraction of the United States’, major beverage companies clearly had to look
elsewhere for the growth their shareholders demanded. The looming
opportunity for twenty-first century was in the world’s developing markets with
their rapidly growing middle class populations.
The World’s Most Powerful Brand
Inter brand’s Global Brand Scorecard for 2003 ranked Coca-Cola the #1
Brand in the World and estimated its brand value at $70.45 billion. The
ranking’s methodology determined a brand’s valuation on the basis of how
much it was likely to earn in the future, distilling the percentage of revenues
59

60. that could be credited to the brand, and assessing the brand’s strength to
determine the risk of future earnings forecasts. Considerations included
market leadership, stability, and global reach, incorporating its ability to cross
both geographical and cultural borders.
From the beginning, Coke understood the importance of branding and
the creation of a distinct personality.1 8 Its catchy, well-liked slogans1 9 (it’s
the real thing60 (1942, 1969), things go better with Coke60 (1963), coke is its
(1982), can’t beat the Feeling (1987), and a 1992 return to can’t beat the real
thing60) 20 linked that personality to the core values of each generation and
established Coke as the authentic, relevant, and trusted refreshment of choice
across the decades and around the globe.
60

61. Marketing Cola in India
The post-liberalization period in India saw the comeback of cola but
Pepsi had already beaten Coca-Cola to the punch, creatively entering the
market in the 1980’s in advance of liberalization by way of a joint venture. As
early as 1985, Pepsi tried to gain entry into India and finally succeeded with the
Pepsi Foods Limited Project in 1988, as a JV of PepsiCo, Punjab government-
owned Punjab Agro Industrial Corporation (PAIC), and Voltas India Limited.
Pepsi was marketed and sold as Lehar Pepsi until 1991 when the use of
foreign brands was allowed under the new economic policy and Pepsi
ultimately bought out its partners, becoming a fully-owned subsidiary and
ending the JV relationship in 1994.
While the joint venture was only marginally successful in its own right, it
allowed Pepsi to gain precious early experience with the Indian market and
also served as an introduction of the Pepsi brand to the Indian consumer such
that it was well-poised to reap the benefits when liberalization came. Though
Coke benefited from Pepsi creating demand and developing the market,
Pepsi’s head-start gave Coke a disadvantage in the mind of the consumer.
Pepsi’s appeal focused on youth and when Coke entered India in 1993 and
approached the market selling an American way of life, it failed to resonate as
expected.
61

62. 2001 Marketing Strategy
Coca-Cola CEO Douglas Daft set the direction for the next generation of
success for his global brand with a “Think local, act local” mantra. Recognizing
that a single global strategy or single global campaign wouldn’t work, locally
relevant executions became an increasingly important element of supporting
Coke’s global brand strategy.
In 2001, after almost a decade of lagging rival Pepsi in the region, Coke
India re-examined its approach in an attempt to gain leadership in the Indian
market and capitalize on significant growth potential, particularly in rural
markets. The foundation of the new strategy grounded brand positioning and
marketing communications in consumer insights, acknowledging that urban
versus rural India were two distinct markets on a variety of important
dimensions. The soft drink category’s role in people’s lives, the degree of
differentiation between consumer segments and their reasons for entering the
category, and the degree to which brands in the category projected different
perceptions to consumers were among the many important differences
between how urban and rural consumers approached the market for
refreshment.
In rural markets, where both the soft drink category and individual
brands were undeveloped, the task was to broaden the brand positioning while
in urban markets, with higher category and brand development, the task was to
narrow the brand positioning, focusing on differentiation through offering
unique and compelling value. This lens, informed by consumer insights, gave
Coke direction on the tradeoff between focus and breadth a brand needed in a
given market and made clear that to succeed in either segment, unique
marketing strategies were required in urban versus rural India.
62

63. Rural Success
Comprising 74% of the country's population, 41% of its middle class,
and 58% of its disposable income, the rural market was an attractive target
and it delivered results. Coke experienced 37% growth in 2003 in this segment
versus the 24% growth seen in urban are as.
Driven by the launch of the new Rs. 5 product, per capita consumption
doubled between 2001-2003. This market accounted for 80% of India’s new
Coke drinkers, 30% of 2002 volume, and was expected to account for 50% of
the company’s sales in 2003.
Brand Localization Strategy: The Two Indies
India A: “Life ho to aisi”
“India A,” the designation Coca-Cola gave to the market segment
including metropolitan areas and large towns, represented 4% of the country’s
population.3 3 This segment sought social bonding as a need and responded
to inspirational messages, celebrating the benefits of their increasing social
and economic freedoms. “Life ho to aisi,” (life as it should be) was the
successful and relevant tagline found in Coca-Cola’s advertising to this
audience.
India B: “Thanda Matlab Coca-Cola”
Coca-Cola India believed that the first brand to offer communication
targeted to the smaller towns would own the rural market and went after that
objective with a comprehensive strategy. “India B” included small towns and
rural areas, comprising the other 96% of the nation’s population. This
segment’s primary need was out-of-home thirst-quenching and the soft drink
category was undifferentiated in the minds of rural consumers. Additionally,
63

64. with an average Coke costing Rs. 10 and an average day’s wages around Rs.
100, Coke was perceived as a luxury that few could afford.
In an effort to make the price point of Coke within reach of this high-
potential market, Coca-Cola launched the Accessibility Campaign, introducing
a new 200ml bottle, smaller than the traditional 300ml bottle found in urban
markets, and concurrently cutting the price in half, to Rs. 5. This pricing
strategy closed the gap between Coke and basic refreshments like lemonade
and tea, making soft drinks truly accessible for the first time. At the same time,
Coke invested in distribution infrastructure to effectively serve a disbursed
population and doubled the number of retail outlets in rural areas from 80,000
in 2001 to 160,000 in 2003, increasing market penetration from 13 to 25%.
Coke’s advertising and promotion strategy pulled the marketing plan
together using local language and idiomatic expressions. “Thanda,” meaning
cool/cold is also generic for cold beverages and gave “Thanda Matlab Coca-
Cola” delicious multiple meanings. Literally translated to “Coke means
refreshment,” the phrase directly addressed both the primary need of this
segment for cold refreshment while at the same time positioning Coke as a
“Thanda” or generic cold beverage just like tea, lassi, or lemonade. As a result
of the Thanda campaign, Coca-Cola won Advertiser of the Year and Campaign
of the Year in 2003.
64

65. CORPORATE SOCIAL RESPONSIBILITY
As one of the largest and most global companies in the world, Coca-
Cola took seriously its ability and responsibility to positively affect the
communities in which it operated. The company’s mission statement, called
the Coca-Cola Promise, stated: “The Coca-Cola Company exists to benefit
and refresh everyone who is touched by our business.” The Company has
made efforts towards good citizenship in the areas of community, by improving
the quality of life in the communities in which they operate, and the
environment, by addressing water, climate change and waste management
initiatives. Their activities also included The Coca-Cola Africa Foundation
created to combat the spread of HIV/AIDS through partnership with
governments, UNAIDS, and other NGOs, and The Coca-Cola Foundation,
focused on higher education as a vehicle to build strong communities and
enhance individual opportunity.
Coca-Cola’s footprint in India was significant as well. The Company employed
7000 citizens and believed that for every direct job, 30-40 more we re created
in the supply chain.
Like its parent, Coke India’s Corporate Social Responsibility (CSR)
initiatives were both community and environment-focused. Priorities included
education, where primary education projects had been set up to benefit
children in slums and villages, water conservation, where the Company
supported community-based rainwater harvesting projects to restore water
levels and promote conservation education, and health, where Coke India
partnered with NGOs and governments to provide medical access to poor
people through regular health camps. In addition to outreach efforts, the
company committed itself to environmental responsibility through its own
business operations in India including.
65

66.  Environmental due diligence before acquiring land or starting projects.
 Environmental impact assessment before commencing operations.
 Ground water and environmental surveys before selecting sites.
 Compliance with all regulatory environmental requirements.
 Ban on purchasing CFC-containing refrigeration equipment.
 Waste water treatment facilities with trained personnel at all company-
owned bottling operations.
 Energy conservation programs.
 50% water savings in last seven years of operations
66

67. RESEARCH
METHODOLOGY
67

68. RESEARCH METHODOLOGY
Scope of the study:
The research pertains to the study of consumer choice for soft drinks at Udaipur
market. This study is attempt to analyze the present top brands preferred by
customer for soft drink in udaipur market, examine the product factors that
influence the purchasing decisions of buyers and to know the relation between
gender & preference for soft drinks & flavors.
Objectives of the study
As every research has some objective/s to achieve or problem/s to solve.
Because every research is conducted in order to achieve some objectives.
Objectives of this research stud y are-
1. To study the brand preference for different kind of soft drinks.
2. To determine the factors that influences the consumer choice of a
particular soft drink.
3. To study the consumption pattern & behavioral aspects of consumes
such as frequency of consumption, quantity of consumption, place of
consumption etc.
4. To study the sales promotion tool/techniques sources of media that
attracts consumers most.
68

69. METHODOLOGY
Data collection
The type of data collected for the research was primary as well as secondary.
Primary data was collected through:
• Direct contact with the customers.
• Questionnaires filled by the customers.
Secondary data was collected through:
• Various journals
• Internet survey reports
69

70. Field work and Sample
While developing and utilizing a sample for the research purpose, the following
steps were used:
• Defining the universe
• Developing the sample frame
• Selecting a sampling frame
• Determining the sample size
• Selecting the research instrument
Universe
The universe or population is the specific group of people is the specific group
of people from conditions, activities, etc. which form the pivotal point of the
project.
For developing and using sample, it becomes the primary duty of researcher to
define the population from which shehe intends to draw the sample.
The universe of my project is about 130 consumers of Udaipur city, which
formed the pivotal point of my project.
Sampling frame
A sampling frame may be defined as the listing of the general components of
the individual unit that comprise the defined population.
In case of my project, sampling frame is various consumers frame is various
consumers including lower middle class, middle class and rich class.
70

71. Sampling procedure
After defining the sampling frame, other important point to be discussed is
which sampling procedure to be adopted.
A simple random sampling technique will be used to understand customer’s
outlook towards the soft drinks.
Sample size
130 consumers of Udaipur city an attempt will be made to make the sample
representative of the whole population under study.
Research instrument:
Questionnaires were used to find out “Factors influencing consumer choice of
soft drinks” in Udaipur city with the help of the questionnaire, filled by 130
consumers, the result was analyzed.
The process was followed to prepare a questionnaire:
1. Specify the information needed.
2. Determined the types of questions to be asked.
3. Deciding the number and sequence of questionnaire.
4. Preparing preliminary draft of questionnaire.
5. Revised and protested the questionnaire.
71

72. Limitations
Although the research was conducted in a way to ensure accurate results but
certain errors might have occurred due to some unavoidable reasons. Some of
the limitations of the project are:-
Data collection
1. Non-response by some of the respondents.
2. Since the population is not homogeneous, some biasness might have
creped in.
3. The sample of convenience, thus it is not the true representative of the
complete.
MEASUREMENT ERROR
There was certain degree of misinterpretation by the respondents about the
points raised in the interview.
72

73. ANALYSIS
&
INTERPRETAYION
73

74. Data Analysis and Interpretation
1. Gender wise profile:
No. of Respondents In%
Males 70 54%
Females 60 46%
Total 130 100%
Graph 1.1
Gender wise Profile
Female
Male
46% Male
54% Female
Interpretation:
As the above graph shows that there were equal male and female respondents,
males were little higher than females by only 4%.
74

75. 2. Age wise Profile:
More
10-20 21-30 31-40
In % In % In % than 40 In % Total
years years years
years
Male 12 17% 28 40% 21 30% 9 13% 70
Female 14 23% 20 33% 16 27% 10 17% 60
Total 26 20% 48 37% 37 28% 19 15% 130
Graph 2.1
Age Wise Profile of Males Respondents
10-20 years 21-30 years 31-40 years More then 40 years
13% 17%
30%
40%
Interpretation:
As the above graph clearly depicts that most of males respondents [40%]
were youth as fall into the category of 21-30 years.
75

76. Graph 2.2
Age Wise Profile of Females Respondents
10-20 years 21-30 years 31-40 years More then 40 years
17% 23%
27%
33%
Interpretation:
As the above graph clearly depicts that most of females respondents
[33%] were also youth as they fall into the category of 21-30 years.
3. Occupation wise Profile:
76

77. Other [Students
Service In % Business In % Professionals In % housewives In %
etc.]
Male 28 40% 14 20% 9 13.% 19 27%
Female 10 17% 0 0% 8 13.% 42 70%
Total 38 28.% 14 10% 17 13.% 61 47%
Graph 3.1
Occupation Wise Profile of Males
Service Business Professionals Students
27%
40%
13%
20%
Interpretation:
As the above graph clearly shows that there were most of males
respondents [40%] were service category
Graph 3.2
77

78. Occupation Wise Profile of Fem ales
Service Students Professionals Housew ife
17%
43%
27%
13%
Interpretation:
As the above graph clearly shows that there were most of females
respondents [43%] were housewives category
4. Income group wise profile:
78

79. Less than In % 10,000- In % 15,000- In % More than In %
Total
Rs. 10,000 15,000 20,000 20,000
Male 37 53% 9 13% 9 13% 15 21% 70
Female 42 70% 4 7% 8 13% 6 10% 60
Total 79 61% 13 10% 17 13% 21 16% 130
Graph 4.1
Incom e Wise Profile of Males
Less then Rs. 10,000 10,000-15,000
15,000-20,000 More then Rs. 20,000
21%
13% 53%
13%
Interpretation:
As the above graph clearly shows that there were most of males
respondents [53%] were income group of Rs. Less than Rs. 10,000.
79

80. Graph 4.2
Incom e Wise Profile of Fem ales
Less then Rs. 10,000 10,000-15,000
15,000-20,000 More then Rs. 20,000
10%
13%
7%
70%
Interpretation:
As the above graph clearly shows that there were most of females
respondents [70%] were income group of Rs. Less than Rs. 10,000.
5. Ranking of different flavors of soft drinks according to
choice
of consumers:
80

81. Graph 5.1
Ranking of Soft Drinks Flavors of Respondents
Males Females
Lemon 3
4
Mango 2
1
Orange 1
3
Cola 4
2
0 1 2 3 4
Interpretation:
The above graph shows that Mango Flavor is preferred most by the male
customers than next is Cola & Lemon is least preferred by them.
The above graph shows that Orange Flavor is preferred most by the
female customers than next is Mango & Cola is least preferred by them.
6. Brand recall of different soft drink brands:
Brand
Cola Pepsi Thums up Fanta Slice Mirinda Limca Fruity Maza
Recall
81

82. Top of
the mind 70% 60% 60% 65% 60% 40% 45% 55% 60%
recall
Unaided
30% 40% 40% 35% 40% 60% 55% 45% 40%
recall
Graph 6.1
Top of the mind recall
Brand Recall of different soft drink brands
Unaided recall
70
65
60 60 60 60 60
55 55
45 45
Persent
40 40 40 40 40
35
30
up
a
ca
i
e
a
a
e
ty
ps
nd
ok
nt
az
ic
ui
m
s
Pe
Sl
Fa
i ri
Fr
C
M
um
Li
M
Th
Interpretation:
As the above graph shows that comparatively coke is at the top of the
mind recall by most of customers [70%] and next is Pepsi. In Unaided brand
recall Maza and Fruity.
7. Ranking of factors that influence the consumer choice of soft
drink:
Factors Male Female
Taste 1 1
Price 2 5
Health 3 3
82