Sales Of Coca Cola Products In Hyderabad

This project has been undertaken to do a detailed analysis of the Retail Outlets. The company aimed that coke, its branded soft drinks, would stand for the highest level of Quality & Quantity and an enhanced customer experience.

The project aims to do a gap analysis of these retail outlets and find the difference between the actual and the expected performance. The difference in their performance level is measured by visiting these outlets to observe and check the level of services delivered to the customer there.

The project also tries to find out the attitude of the dealers of the outlets towards this initiative of the company. It aims to find their motivation level and their satisfaction from the company and how this affects the sales.

Customers present at the outlets are also surveyed to find their satisfaction level and their expectations from the company. The survey would also help to understand the behaviour of the customers.

An analysis of the sales figures of the outlets is done to see if there has been any change in the sales. The sales figures of every month in different cities of Hyderabad are compared to see if there is any difference between them. The findings from the study would provide the company with insights into areas that need to be improved. Recommendations would be given for further strengthening the proposition in the city of Hyderabad.

INTRODUCTION

800px-Coca-Cola_logo

Open happiness.

Introduction:

The purpose of the study is to provide qualitative inputs to the organization about strengthening its proposition in the city of Hyderabad. The project aims to do a gap analysis between the actual performance of the Retail outlets and the expected performance by the company. It also aims to evaluate if the brand has helped increase its sales figures and the customer satisfaction level.

OBJECTIVE:

The purpose of the study is to give the company a detailed report on the current performance level of the retail outlets and the gap between the actual and the expected performance of these outlets. By identifying the gaps the company would get an insight on areas which can be improved upon.

Scope:

The report would be useful to the company to:

Find the gap between the actual performance and the performance expected by the company in the functioning of the outlets in the city of Hyderabad.

Find the dealer’s perception towards the initiative of the company and his satisfaction level from the company.

Analyze the sales figures of the retail outlets before and after the implementation of the concept RED and compare these figures with that of the normal retail outlets to see if there is any significant difference between the two figures.

Find the satisfaction level of the customers from the outlets and compare this satisfaction level with that of the customers at the normal retail outlets to see if there is any significant difference.

Summarize the findings and give recommendations to the company to improve the proposition of outlets.

Limitations:

The project had some obvious limitations:

It was difficult to make customers understand the questionnaire and fill it. They generally used to be in a hurry and hence did not like to fill the questionnaire.

In measuring the customer service level by observation method it often so happened that the customer service level would improve in the presence of the observer than on routine days.

Hyderabad is a big city and it is difficult to survey all the customers from every outlet of the city.

The sample size for this research was small owing to limitations of time and cost.

Methodology:

The project was completed in three phases:

The first phase involved the source of data about HCCBPL was its website, internet, articles and company’s unpublished resources. Competitors study was also done using the internet and articles etc.

Second phase involved the survey and observation study. The Outlets in the city were visited. Survey was conducted over the dealers. Also, observations were made to give ratings on the customer service level, infrastructure etc. in order to do the gap analysis.

Finally the third phase involved analyzing the results and coming up with the findings and recommendations.

Research design:

The research is exploratory in nature with the following characteristics:

To provide insights and understandings on an aspect.

Sample is small

Research method is flexible

Data collection:

The research involved both primary and secondary data collection.

Primary data: The primary data (i.e., related to analysis part) was collected from the customers by the Performa designated for the purpose given by the Company.

Secondary date: The secondary data was collected from the company’s brochures, manuals and journals and also from the websites of Hindustan Coca-Cola Beverages Pvt. Ltd.

Questionnaire development and pre-testing:

A properly designed questionnaire can tap the necessary information from the respondents. In framing a questionnaire the researcher must ensure that the questions are designed to draw information that will fulfil research objective. Also the researcher must make sure of the target population for the same.

A questionnaire can contain both open and close ended questions. Close ended questions give respondents a finite set of specified responses to choose from. Our questionnaire contains structured questions i.e. which have a specified number of responses .We used Likert rating scale for responses that requires the respondent to indicate a degree of agreement or disagreement with each of series of statement about the stimulus objects.

We used a rating scale of 1 to 5 in which 1stands for strongly disagree and 5 stands for strongly agree. There were also questions which elicited qualitative responses. The questions wording were kept simple and easy to understand.

Pre-testing refers to testing the questionnaire on a small sample of respondents selected on a convenient basis that is not too divergent from the actual respondent. It includes testing all aspects of questionnaire starting from the question content to question sequence. Pre- testing enables the researcher to revise the questionnaire by identifying the flaws and eliminating any ambiguous questions. We will go for pre-testing on 30 respondents.

Sampling Technique:

Sampling is done to select a target audience for the purpose of determining the characteristic of the whole population. There are two basic approaches to sampling, i.e. – probability and non-probability. In our research we have used non-probability sampling which involves the selection of units based on factors other than random chances. Cluster sampling, Convenience sampling, quota sampling, judgment sampling and snowball sampling are few examples of non-probability sampling.

‘Sample Size

Dealers Surveyed: 100

Consumers Surveyed: 25

Theoretical Framework:

The word MARKET is derived from the Latin word MARCATUS which means MERCHANDISE (Buy & Sell products for profit) place where business is conducted. It is usually used to refer a place where actual buying and selling takes place. If we look at this definition in more detail Marketing is a management responsibility and should not be solely left to junior members of staff.

Marketing requires co-ordination, planning, implementation of campaigns and a competent manager(s) with the appropriate skills to ensure success. Marketing objectives, goals and targets have to be monitored and met, competitor strategies analysed, anticipated and exceeded. Through effective use of market and marketing research an organisation should be able to identify the needs and wants of the customer and try to delivers benefits that will enhance or add to the customers lifestyle, while at the same time ensuring that the satisfaction of these needs results in a healthy turnover for the organization.

The American Marketing Association (AMA) states, “Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individuals and organizational objectives”.

A market-focused, or customer-focused, organization first determines what its potential customer desire, and then builds the product or service. Marketing theory and practice is justified in the belief that customers use a product/service because they have a need, or because a product/service provides a perceived benefit.

Two major factors of marketing are the recruitment of new customers (acquisition) and the retention and expansion of relationships with existing customers (base management).

Once a marketer has converted the prospective buyer, base management marketing takes over. The process for base management shifts the marketer to building a relationship, nurturing the links, enhancing the benefits that sold the buyer in the first place, and improving the product/service continuously to protect the business from competitive encroachments.

Marketing methods are informed by many of the social sciences, particularly psychology, sociology, and economics. Anthropology is also a small, but growing, influence. Market research underpins these activities. Through advertising, it is also related to many of the creative arts.

For a marketing plan to be successful, the mix of the four “Ps” must reflect the wants and desires of the consumers in the target market. Trying to convince a market segment to buy something they don’t want is extremely expensive and seldom successful. Marketers depend on marketing research, both formal and informal, to determine what consumers want and what they are willing to pay for it.

Marketers hope that this process will give them a sustainable competitive advantage. Marketing management is the practical application of this process. The offer is also an important addition to the 4P’s theory.

Within most organizations, the activities encompassed by the marketing function are led by a Vice President or Director of Marketing. A growing number of organizations, especially large US companies, have a Chief Marketing Officer position, reporting to the Chief Executive Officer.

Two Levels of Marketing:

Strategic Marketing attempts to determine how an organization competes against its competitors in a market place. In particular, it aims at generating a competitive advantage relative to its competitors.

Operational Marketing executes marketing functions to attract and keep customers and to maximize the value derived for them, as well as to satisfy the customer with prompt services and meeting the customer expectations. Operational Marketing includes the determination of the marketing mix.

Four Ps:

Marketing mix:

In popular usage, “marketing” is the promotion of products, especially advertising and branding. However, in professional usage the term has a wider meaning which recognizes that marketing is customer centred. Products are often developed to meet the desires of groups of customers or even, in some cases, for specific customers. E. Jerome McCarthy divided marketing into four general sets of activities. His typology has become so universally recognized that his four activity sets, the Four Ps, have passed into the language.

The four Ps are:

Product: The product aspects of marketing deal with the specifications of the actual goods or services, and how it relates to the end-user’s needs and wants. The scope of a product generally includes supporting elements such as warranties, guarantees, and support.

Pricing: This refers to the process of setting a price for a product, including discounts. The price need not be monetary – it can simply be what is exchanged for the product or services, e.g. time, energy, psychology or attention.

Promotion: This includes advertising, sales promotion, publicity, and personal selling, and refers to the various methods of promoting the product, brand, or company.

Placement or distribution: This refers to how the product gets to the customer; for example, point of sale placement or retailing. This fourth P has also sometimes been called Place, referring to the channel by which a product or services is sold (e.g. online vs. retail), which geographic region or industry, to which segment (young adults, families, business people), etc.

Marketing Mix The Four P Components of the Marketing Mix

Target Market

PRODUCT PRICE PROMOTION PLACE

Product Variety

Quality

Design

Features

Brand

Name

Packaging

Sizes

Services

Warranties

List Price

Discounts

Allowances

Payment Period

Credit terms

Sales Promotion

Advertising

Sales force

Public relations

Direct Marketing

Channels

Coverage

Assortments

Locations

Inventory

Transport

These four elements are often referred to as the marketing mix. A marketer can use these variables to craft a marketing plan. The four Ps model is most useful when marketing low value consumer products. Industrial products, services, high value consumer products require adjustments to this model. Services marketing must account for the unique nature of services. Industrial or B2B marketing must account for the long term contractual agreements that are typical in supply chain transactions. Relationship marketing attempts to do this by looking at marketing from a long term relationship perspective rather than individual transactions.

As a counter to this, Morgan, in Riding the Waves of Change (Jossey-Bass, 1988), adds “Perhaps the most significant criticism of the 4 Ps approach, which you should be aware of, is that it unconsciously emphasizes the inside-out view (looking from the company outwards), whereas the essence of marketing should be the outside-in approach”. Even so, having made this important caveat, the 4 Ps offer a memorable and quite workable guide to the major categories of marketing activity, as well as a framework within which these can be used.

Promotional mix.

1. Advertising:

Any paid presentation and promotion of ideas, goods, or services by an identified sponsor.

Examples: Print ads, radio, television, billboard, direct mail, brochures and catalogs, signs, in-store displays, posters, motion pictures, Web pages, banner ads, and emails.

2. Sales promotion:

Short-term incentives to encourage the purchase or sale of a product or service. Sales-stimulation achieved through contests, demonstrations, discounts, exhibitions or trade shows, games, giveaways, point-of-sale displays and merchandising, special offers, etc.

3. Personal Selling:

As the name implies, this form of promotion involves personal contact between company representatives and those who have a role in purchase decisions. Face-to-face communication between buyer and seller

Examples: Sales presentations, sales meetings, sales training and incentive programs for intermediary salespeople, samples, and telemarketing. Can be face-to-face or via telephone.

4. Publicity:

The communication of a product, brand or business by placing information about it in the media without paying for the time or media space directly. Otherwise known as “public relations” or PR

Examples: Newspaper and magazine articles/reports, TVs and radio presentations, charitable contributions, speeches, issue advertising, and seminars.

5. Direct marketing:

Direct communications with carefully targeted individual consumers to obtain an immediate response and cultivate lasting customer relationships. That is Contacting and influencing carefully chosen prospects with means such as telemarketing and direct mail advertising.

FAST MOVING CONSUMER GOODS:

The Fast Moving Consumer Goods (FMCG) business is built on two pillars Brand and Distribution. The comprehensive conceptual coverage of these and other key marketing concepts are as follows:

1. Branding

2. Valuation of Brands

3. Distribution

4. Marketing

5. Market Research

6. Market Segmentation and Positioning

7. Advertising and Promotions

INDUSTRY PROFILE

INDIAN FMCG INDUSTRY

MARKET TRENDS:

The latest figures of industrial growths how a continuous strong growth in durable consumer products, as well as of consumer non-durable. There has been a slowing down in production of automobiles but that is after record increase in the last year. As far as Indian Vs foreign companies are concerned there appears to be a continuous decline of Indian owned brands in national consumer markets. Foreign brands are growing in dominance as foreign owners adapt to Indian consumer preferences, market realities, and change management styles accordingly. The lack of strong pre-emptive action by Indian consumer product companies, that was obvious throughout the 1990s continued in the last two years as well. It almost looks as if many of them are tired of trying to compete and prefer to sell out, pocket the gains and move to something else.

RURAL MARKETS:

Rural markets have shown fast growth when special small pack sizes are available, and more so in the case of “necessity” and “emerging” products, while lifestyle products shown good growth even in standard packs. The developed ones stated with good infrastructure (Gujarat, Haryana, Karnataka, Kerala, Maharashtra, Punjab, Tamilnadu) show faster penetration growth than the developing states and even more so for lifestyle products, larger pack sizes are bought in developed than in developing states, as also a large proportion of premium products. Products designed for the rural consumers and taking account of their cultural diversity, lifestyle, standard of living, disposable income, consumption pattern, and communication facilities appear to be key elements in a rural marketing strategy.

FOREIGN AND INDIAN:

The “swadeshi” (National) argument, put graphically many years ago as “computers chips and not potato chips” was primarily directed at the entry of foreign companies into consumer goods. This argument expected that Indian brands would be unable to compete with foreign brands who would take over FMCG markets. In fact Indian brands have declined in national markets and Indian companies have diminishing presence in consumer product markets in India. The national markets are being taken over by foreign brands and foreign companies. This is across the whole spectrum of products with a few rare exceptions.

FRANCHISING:

There are other service areas where we are now seeing tremendous growth. Many can be labelled under the head “franchising”. Franchising is now taking off in India. It has already shown spectacular growth in education, particularly in information technology, but many others coming into franchising include for pathology laboratories; entertainment including game parlour, bowling alleys, amusement parks, pool parlours, multiplex cinema theatres etc; specialized food services epitomized by Sub-way sandwich and salads bars, star bucks with coffee cafes. Personal grooming and fitness centres are yet another fast growing franchising area. It is estimated that in franchising, every new franchisee will create new jobs. We can expect franchising to be major source of new employment.

RETAIL TRADE:

The forthcoming revolution in retail trading in India is also important part of the dramatic changes that are taking place in Indian consumer markets. They are part of the change in life styles that the young and confident new Indian is bringing out and he/she comes to maturity. There is a revolution taking place in clothing for men, women and children. There is an abundance of new entrants with their brands into the market, which within two years have become a major element of the total market and are growing rapidly. Shopping malls are other areas of major new activity.

CONCLUSION:

There is a revolution taking place in distribution with the entry in the metros as well as smaller cities and towns, of self service stores, super markets, shopping malls, departmental stores, chains stores, and information technology related ones. But that does not mean that ‘morn and pop’ stores will die. What will certainly happen is that many will become spruced up. At the same time, direct selling by mail order, and door-to-door, will see tremendous growth. Already, a recent entrant kike Amway has crossed Rs 100 crores in turnover and is expecting faster growth, especially as they prepare to tap rural and mass markets.

Foreign brands are likely to dominate most Indian consumer products. Indian brands that are in niche markets have a better chance of surviving and growing. Indian business has to overcome their history of past short term thinking modes.

SOFT DRINK SECTOR OVERVIEW

INTRODUCTION:

The term “soft drink” refers to all types of non-alcoholic and carbonated sweetened, flavoured beverages etc. They are all artificially sweetened. The soft drink industry has undergone many changes with changing consumer needs, wants and also changing Government policies. This formed the basis for different innovations in packaging such as bottles, cans, tetra packs and pet bottles in a variety of flavours.

RESTROSPECTION OF INDIAN SOFT DRINK INDUSTRY:

The soft drinks market till early 1990 were in the hands of domestic players like Campa, Thums Up, Limca etc, but with the opening of the economy and liberalization of economic policies, many foreign multinationals started ventures in India by buying over competitors, the two American Cola giants have cleared up the arena and are backing all their power behind the Indian Franchise of their global girdling brands. While Pepsi which scores over Coke but this difference is fast decreasing (courtesy huge ad spending by both the players). Pepsi entered Indian market in 1991 and Coke re-entered (after they were sent away in 1977, by then central Government) in 1993.

Pepsi has been targeting its products towards the youth and it has struck the right chord with the market, and the sales have been doing well by sticking to this youth bandwagon. Coke on the other hand, struggled initially in the market. In the span 7 years of its operations in the country, it has changed its CEO four times but finally they seem to have started understanding the pulse of the Indian consumers.

The soft drink market in India is growing at the rate of 10% every year. With growing urbanization and the younger generation, which had liking for non-conventional foods and beverages, there is a good possibility that the per capita consumption will go up.

This sector can be understood in more detail by the following points.

Background

Segmentation

Consumer habits and practices

Market players and market share

Major players and market share

Distribution Network

Manufacturing process

Retailer’s perception.

MARKET CHARACTERISTICS:

The soft drink market is highly skewed in terms of place of consumption, in terms of regional distribution and soft drink flavours as well as in terms of SKUs. While 80% of the consumption is impulse based outside home, 20% comes from consumption at home. This trend is slowly changing with increase in occasion led sales. Changing lifestyle, increasing urbanization and impact of liberalization has slowly and gradually started moving the market from impulse led to occasion led home refrigeration led consumption.

The market preference is highly regional based. While Cola drinks have main markets in metro cities and northern states 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.

PROBLEMS SPECIFIC TO INDIAN SOFT DRINK INDUSTRY:

The government of India has considered the soft drink as non essential. As a result, the government perception levied heavy excise duty on the bottled soft drink. Today soft drink costs Rs.9 to Rs.55 based on the quality to the customers. However, in a country like India where 40% of the population exists below poverty line, consumers cannot afford such price. As a result the trading activity of the soft drinks is concentrated in and around major towns and cities where the purchasing power of the people and standard of living is high.

Growth rate of this industry in India is also not encouraging. In fact, date from the Ministry of Food Processing shows that growth rate in the soft drink market was the minimum in 1996. Changes in technology and consumer taste brought about many changes in the Indian soft drink industry from the time of introduction of soft drink in India till today.

COMPANY PROFILE

COCA-COLA

John Styth Pemberton first introduced the refreshing taste of Coca-Cola in Atlanta, Georgia in the year 1886.

“2% of all beverages consumed each day (including water) are coca-cola and that percentage is growing.”

Operated 200+ countries, 55000 direct man power, 400 brands, 4 out of the INDIA’S top 5 soft drink brands.

75% of the coke revenue coming from outside of US

Coke entered India in 1954 and turns backs in 1977.Re-entered in the year 1993 to refresh Indian consumers.

126 years in business.49 consecutive years with increased dividends.

3500+ Beverages and 139600 worldwide employees.

Mission, Vision & Values:

The world is changing all around us. To continue to thrive as a business over the next ten years and beyond, we must look ahead, understand the trends and forces that will shape our business in the future and move swiftly to prepare for what’s to come. We must get ready for tomorrow today. That’s what our 2020 Vision is all about. It creates a long-term destination for our business and provides us with a “Roadmap” for winning together with our bottling partners.

Mission:

To refresh the world…

To inspire moments of optimism and happiness…

To create value and make a difference.

Vision:

People: Be a great place to work where people are inspired to be the best they can be.

Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy people’s desires and needs.

Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring value.

Planet: Be a responsible citizen that makes a difference by helping build and support sustainable communities.

Profit: Maximize long-term return to shareowners while being mindful of our overall responsibilities.

Productivity: Be a highly effective, lean and fast-moving organization.

Values:

Leadership: The courage to shape a better future

Collaboration: Leverage collective genius

Integrity: Be real

Accountability: If it is to be, it’s up to me

Passion: Committed in heart and mind

Diversity: As inclusive as our brands

Quality: What we do, we do well

Business Model:

PITA is a profit Creation Model .By implementing PITA Model, we can increase profit of our Customer as well as company’s.

P stands for Population

I stand for Incidence

T stands for Transaction

A stands for Average Profit

POPULATION:

The population can be defined as the shoppers or consumers in given universe or can be defined as number of footfalls in given outlet where Coca-Cola products are available.

The main purpose of RED is to attract the population or to increase the footfalls in an outlet where Coca-Cola products are present. As described the main purpose of RED is to increase the footfalls in an outlet so to make it happen following steps are taken, which are described below.

Following are the few activation standards that are taken outside the outlet.

Cooler at the entrance

Standee, Sign at the entrance

Combo Boards at the entrance

INCIDENCE:

Incidence can be described as the percentage of population that buys our product. For an incidence to occur, we do some in shop activation which helps us to increase the percentage of people to buy our products. Incidence mostly plays with the Impulse of the consumer who is getting into the outlet. Following few steps have to be taken to increase the incidence.

Cooler in Prime Position

Cooler Pure and Clean

Rack Display

Shelf Display

Combo Boards

Table Activation

Counter Top Display

TRANSACTION:

Transaction can be described as amount in volume brought per transaction. Suppose a consumer goes into the shop for his personnel consumption by looking and by getting attracted towards the large PET bottles, he / she might go for the large PET bottles.

So to increase the transaction size per consumer a few steps have to be taken as follows.

Rack display

Cooler top Display

300 ML instead of 200 ML

600 ML and 1.5 Lit PET availability

Cooler in Prime Position

AVERAGE PROFIT:

This can be described as the amount of profit in value per transaction.

Placing higher Margin pack like Mobile PET, 1.5 Lit, Cans, Maaza 250 ML, Maaza 600 ML, Maaza 1.2 Lit, we can increase the average profit , because the margins on these packs is higher than the RGBs.

This can be better understood by the following table:

Coca-cola Company is divided into two parts. They are as follows:

The main objective of the project is to increase sales of coca-cola products.

SALES

S- Serve with smile

A- Attitude

L- lovable by others (outlet)

E-efficient (20/80)

S-seldom fails

In most FMCG, 73% of purchasing decisions are impulsive.

Better product assortment wills impulse better product purchase.

As the merchandise is more the sales will be increased

Coca-cola has two types of Operations. They are as follows:

COBO : Company Owned Business Operations.

1. DSD: Direct Sales Distribution.

2. INDIRECT: It is sub divided into 3 parts.

AMC: Area Marketing Contractor.

ANCHOR

MILK POINT

FOBO : Franchise Owned Business Operations.

The main activity of FOBO is SGA (Sales Generating Asset) & CDE (Cool Drinks Equipment)

COBO helps FOBO in supp