A STUDY ON THE COMPARATIVE ANALYSIS OF COCA COLA WITH PEPSI IN TRICHY

A project report submitted in partial fulfillment of the requirements for the degree of

MASTER OF BUSINESS ADMINISTRATION

By

JOE ALLWYN RAJA.JReg. No: 09PBA137

DEPARTMENT OF MANAGEMENT STUDIESST.JOSEPH’S COLLEGE (AUTONOMOUS)

TIRUCHIRAPALLI – 620 002 APRIL 2011

CERTIFICATE1

This project report titled “A STUDY ON THE COMPARATIVE ANALYSIS OF COCA COLA WITH PEPSI IN TRICHY” submitted by JOE ALLWYN RAJA.J, Registration Number: 09PBA137, for the award of degree of Master of Business Administration of Bharathidasan University, Tiruchirappalli, is a record of bonafide research work done by his and it is not submitted for the award of any degree, diploma, associate ship, fellowship of any other University or Institution.

Director Internal Guide

Viva Voce conducted on ………………………

Internal Examiner External Examiner

2

ACKNOWLEDGEMENT

There were many people who were there to guide and support me in the journey of doing this project. At the outmost, I thank Lord Almighty for guiding me in the right path throughout this work.I would like to express my gratitude to Rev.Fr.Dr.A. Antony Pappuraj S.J., Director, St.Joseph’s Institute of management who has been generous in providing me all the necessary facilities in carrying out this project.

I express my sincere thanks to my adviser Prof.Michael Sammanasu,faculty, St.Joseph’s Institute of management for being my source of inspiration and for guiding me throughout this work. I am grateful to have a learning opportunity from him and also for his valuable suggestions regarding the analysis of the project.

I wish to thank all my family members whose blessings, inspiration and encouragement have resulted in the successful completion of this project. I would like to extend my sincere thanks to my batch mates whose encouragement and ideas enriched my project Finally I would like to thank everyone who was knowingly or unknowingly supporting me in this journey.

April 2011 (Joe Allwyn Raja.J)

3

DECLARATION

I, JOE ALLWYN RAJA.J (09PBA137) hereby declare that this project titled, “A STUDY ON THE COMPARATIVE ANALYSIS OF COCA COLA

WITH PEPSI IN TRICHY”, is an authentic record of the work done by me, under the guidance Mr.Michael Sammanasu, faculty of St.Joseph’s Institute of Management, St.Joseph’s College, Trichy.

This report is intended only for academic purpose and may not be used for

any other purpose, the findings in this report are based on the data

collected by me during the project period and the suggestions are based

on the analysis done.

(Joe Allwyn Raja.J

CONTENTS: Page

No.

4

I. Introduction. 6

I.1 Scope of study 10

I.2. Objectives of the project. 11

I.3. Data Analysis 12

I.4. Limitations of the study 14

II. Review of Literature. 15

III. Research Methodology 23

IV. Company Profile 18

IV.1. A brief insight of Beverages

Industry

28

IV.2. Soft drinks in India 30

IV.3 Hindustan Coca Cola Beverages Pvt

Ltd.

33

IV.4 Market Share in India 38

IV.5 Opportunity in India 38

IV.6 Product Profile 39

IV7 Marketing strategies of Coke 41

IV.8 Marketing strategies of Pepsi 44

IV.9 SWOT Analysis of Coke and Pepsi 45

V. Data Analysis & Analysis 47

V.1 The comparison of Coke and Pepsi in the

survey areas

69

VI. Findings 71

VII. Conclusion 73

VIII. Suggestions 74

IX. Bibliography 77

5

I. INTRODUCTION

Today many new companies are coming in to existence and because of this the competition is also growing rapidly. Because of this reason they have to compete with their competitors constantly. In some industries the new companies may not come in to existence but the competition between the existing companies is growing more and more. The soft drink industry is mainly suffering with this particular problem. The Companies have to continuously compete with their competitors to get good market share and good

6

profits. To face their competitors they have to know their position and the competitor’s position in the market. For this, the Company’s will compare itself with their competitor that means they will do the comparative analysis in all aspects.

“Item by Item comparison of two or more comparable alternatives, processes, products, qualifications, set of data and systems etc. in accounting for, for example changes in a financial statement’s items over several accounting period may be presented together to detect the emerging trends in the firm’s operations and results”.

----- Business Dectionary.com

From this we can understand that Comparative analysis means the comparison between the similar things (products, place, technologies, living beings and etc.) regarding the features, nature, functions, behavior, SWOT, and many other characters is called Comparative analysis. In this comparative analysis the researcher will take any two or more similar products (that means the functioning of the products are almost same) and compare the common and the similar features of the products to find out that which product is the best one.

In comparative analysis the Company will compare itself with the company which is in the top position in that industry or which is top in the position in that particular area or region; from this they can understand their position in that industry. It will be very useful know what is the strength and weakness of the Company and the company will try rectify the problems in order to increase their performance to reach and to beat out that other Company with whom they are comparing their Company.

In the present scenario in the soft drink industry, the two gaint companies are fighting with each other. They are adopting and changing the strategies frequently. They are changing their schemes and offers according to their competitors. They have to analyse their competitor’s strategies and techniques comparing with their company’s strategies and techniques. The study on

7

comparative Analysis of Pepsi and Coke is very useful to Pepsi Company. The comparison is done on all aspects of the Company. From this analysis the company can know their position in the soft drinks market. Through this Analysis Pepsi Company can know the merits and demerits of the Company comparing with Coke Company.

There are two famous beverage companies, Coke and Pepsi, have been competing dramatically and distributed the beverage market profit for several decades. In the free market, it is hard to exactly tell which one is the winner within the perfect competition, because both companies using the different styles of commercials and products to expand their markets. Personally I believe that Pepsi earned higher profit than Coke because Pepsi has better marketing strategies and the representative for its commercials and T.V Ads cost is lowers. I choose Pepsi over Coke because Pepsi has fair marketing strategy that attracts all generation of people of all ages, whereas Coke targets mostly younger generation and tries to make an image of Pepsi as a UN cool drink, and Pepsi has made more People made more people to appreciate its value and product than Coke.

Therefore, we should drink Pepsi that knows how to appreciate all audiences of all ages, regardless of their ages and genders. It is interesting to here that Pepsi won the Taste test over Coke in the world wide. This is the good sign for the company to get good market share. More people voted for Pepsi’s taste than Coke’s taste. Coke Company blames that all these taste tests meaningless and not the proper ones to decide the taste and the greatness of the soft drinks. The production cost of Pepsi Company is less than Coke because Pepsi Company is using the Franchisees for the production purpose and giving the remuneration for the production and maintaining the quality of the products by the regular checkups. In case of Coke it has its own production units and producing the products in their own plants, this increases the production cost of the drinks of Coke, because of this reason the profits of Coke reduced when compared to Pepsi.

8

When we compare the commercial Ads of the two companies, Pepsi and Coke there is a major thing that we can pick up from them, which is the representative of their products. In other words who are the representatives in both commercial Ads? The companies try to establish an image to the public is that their brands are closely related to our environment and culture in which we are living. This is the main secret of the Ads of the Soft Drinks. Sometimes they directly hit the egos of the customers and to satisfy their ego they will show the solution, that is the product of the company. This should be taken care by the Advertising department. For this reason they will use different locations of the country and different cultures of the country and different religions of the country in their Advertisements. They mean to say is we are close to your lives. This comparative analysis is totally done on the retailer’s opinion that means this comparative analysis is also helpful to know the belief and faith of the retailers on Pepsi Company. The total data for the study was collected based on the comparison between the two Companies, Pepsi and Coke. From this Pepsi Company can get the positive and negative points of their Company comparatively with Coke Company. During this study some retailers gave some suggestions to improve the quality of the service (supply) and the image of the Company in the market and some people gave some complaints on the dealers of the company that they are not providing the sufficient information about the offers, service and the other things regarding the company. The company can use these suggestions for its improvement and by considering the complaints they can rectify the problems that they are facing from the company or the company dealers.

The Company can not go for the survey on every area to know the position of their products, hence through this comparative analysis the Company can get the information about the position of the Company in that area along with the position of the rival Company in that particular area. In this study the comparison was done in the case of Advertising of the Company’s, the manner they are attracting the customers, the differences in

9

the production functions and etc. were done. From all these comparisons Pepsi Company can know the differences between the Pepsi Company and its competitor Coke Company. Without comparing one Company with another company which is in the same industry they can not know their position in that particular industry. The Company can know that how many retailers are selling their products individually and how many retailers are selling the Pepsi products along with other products in their retail stores. The Company is providing the Visi Coolers to the retailers to store the Pepsi Company products. Through this study the Company got the information that how much percentage of the retailers are using the Pepsi Coolers and how much percentage of the retailers are using Coke Company’s Coolers and their own Coolers. From this information the Company can take the decision to increase the usage of the Pepsi Visi Coolers at the retail stores.

In this manner the study on Comparative analysis of Pepsi and Coke is Very much important and helpful to the Company. Because of this reason only the investigator did his project work on this particular topic with reference to Pearl Bottling Company Pvt. Ltd., Visakhapatnam.

I.2 SCOPE OF THE STUDY

In the present scenario the competitions between the soft drinks increased very high. The companies are struggling a lot to keep up their market share in the industry and to improve the sales of their products i.e. the turnover of the company. For this the company has to know their position in the market and the opinion and the loyalty of the customers and the retailers when compared to their competitor. Because of this reason the comparative analysis is very important and useful to the Company.

10

By the use of comparative analysis the companies can understand the position of the company and the strength of the company in the market. Through the comparative analysis it can be understood that what strategies the competitors are using for the increase the sales volume. From the study the information regarding the opinion of the retailers on the companies comparatively are gathered and this will help to plan for the future to increase the performance of the company and to gain the loyalty of the retailers when compared to the competitors.

Through this study the personal experience in the market field have been gained and theoretical knowledge is implemented in to practice. In this project it is known how the companies are competing with each other to sustain in the market in this tough competitive world. Hence need for the study is felt. However, this type of study has not been carried out earlier by any investigator in this city.

I.3 OBJECTIVES OF THE STUDY

1. To study the overview of Coca Cola Company (Hindustan Coca Cola Beverages Pvt. Ltd.).

2. To know and compare the merchandising of Coke and Pepsi in retail outlets.

3. To identify the retailers opinion towards Coke products when compared to Pepsi products.

4. To offer some finding and suggestions to the company for the improvement of its performance.

11

I.4 DATA ANALYSIS

Data is collected from the retailers through a structured questionnaire. It includes the first hand information from the outlets. It can be viewed as a survey. The questionnaire was especially designed to find out the market share of Coke and Pepsi Companies comparatively in these clusters. Through this information the strengths and weaknesses of Coke and Pepsi Companies in those particular clusters can be analysed. The total primary data was collected from the following clusters.

Thiruverumbur,Palpanai,Kalanai Mathur,Gundur,Subramaniapuram,KK nagar,Gandhi

Nagar AnnaUniversity,Bharathidasan

University,Mandaiyur,Mathur,OFT Chatram Bus Stand Samayapuram

12

Central Bus Stand AnnaMalai Nagar Tvs tollgate,Kajamalai Canonment Petavathalai

The survey was first started at Thiruverumbur and Kalanai on 17/02/11 and completed on 25/02/11 with Central Bus stand. The Investigator personally went to every outlet and asked the total details, which are in the questionnaire and filled those questionnaires. Some of the retailers denied giving the details, then the investigator waited there with patience and collected all the data from that retailers. In the survey many things are learned and useful information are collected and also good experience in the market field are. The investigator almost covered all the retail outlets which are situated in these six clusters and collected the correct information.

13

I.5 LIMITATIONS OF THE STUDY

The study has the following limitations:

1. Time allocated for the study is less which is not sufficient for in-depth study.

2. Unavailability of some information due to the lack of awareness of retailers in these clusters.

3. Bias in the information provided by the retailers.

14

II. REVIEW OF LITERATURE  Re-entry of Coca-Cola in 1993On the 26th of October 1993, Coca-Cola re-entered the Indian market having acquired some of the leading Indian soft drink brands from Parle, namely Thums-Up, Maaza, Limca, Goldspot & Citra. These brands joined Coke’s portfolio of international brands i.e. Coca-Cola, Sprite, Fanta, Schweppes as Coca-Cola India took control of the top soft drink brands in India from the very beginning. From 1993 to 2003, company invested US $ 1 billion in India. 

For the Cricket World Cup 1996, Pepsi was not the official sponsor of the tournament, Coke was. But Pepsi had a whole pool of best players roped in as brand ambassadors from the sub continent and abroad. The ad campaign of “Nothing Official About it” rocked the country and despite Coke being the official sponsor, it was Pepsi which hogged the publicity.Amidst various allegations and controversies, the soft drinks industry in India, supported by its booming economy, strengthening middle class and low per capita consumption, is growing at a cruising pace. The focus has shifted from carbonated drinks to Fruit drinks, with both the companies launching Lemon drinks in 2009-10. In the next few years, the fruit juice category is likely to carry the growth flag forward as consumers become more health conscious. The companies are likely to take more steps to deal with environment sustainability. But the Cola wars are here to stay. We as customers can be assured of superior products and hilarious ads in the process. And are we complaining?

15

  SourceThe article is published in the 2010 edition of theAnnual Marketing

Magazine titled "MADazine" of VGSOM, IIT Kharagpur.

Coca-Cola cuts down prices in Delhi and Uttar PradeshAt a time when sales growth of carbonated drinks has slowed, Coca-Cola has decided to cut down the prices of all its carbonated beverages. Hindustan Coca-Cola Beverages, the bottling arm of Coca-Cola India, has also slightly increased the beverage quantity of its 2-litre PET bottles, while retaining the price point of Rs. 55.

"We cannot comment on specific pricing instances, but generally speaking, pricing and promotional initiatives in our business is very local and is governed by the OBPPC (occasion, brand, price, pack, channel) architecture in a given local geography," a  Coca- Colaspokesman said. However, sources close to the move have informed that the dip in prices is impermanent – original prices will be revised later on.Beverage companies have been badly hit mainly due to extreme cold conditions in the North which resulted in two back-to-back quarters of single-digit growth. Plus, the July-September quarter witnessed single-digit growth on account of record rainfall followed by very cold winters. The new pricing will be implemented from this month onwards.

Both Coca-Cola   and opponent PepsiCo offer similar discounts to augment sales in select markets as special promotional offers. But, so far, PepsiCo has maintained its prices."Depending on the local factors in play, our bottlers introduce various promotional initiatives in their markets and which are consistent with the long-term growth strategy of the Coca-Cola system in India," the Coke spokesman said.

Source: Nargis Namazi | Fri Jan 21, 2011

16

http://www.businessreviewindia.in

Dip in demand for Coke and Pepsi

Company and franchisee-owned plants of both beverage companies in the region of North India, especially UP, Delhi and Rajasthan, are running below capacity now. Moreover, since the past two-three weeks, several production lines in these plants have been stopped.

CK Jaipuria, a leading PepsiCo bottler with franchisee plants in Delhi and Andhra Pradesh, said: “Production is not running to full capacity now. Last year, during this season, there was shortage of supply because demand was exceptionally high.

Since the April-June quarter witnessed temperatures at a 52-year-high, the companies had considerably raised their manufacturing capacities anticipating a strong double-digit growth in the September quarter too.

Coca-Cola posted unit case volume growth of 37% in the July-September fiscal year 2009 quarter, PepsiCo had reported an all-time high 50% volume growth in the same quarter last year. In the April-June quarter this year, Coca-Cola India’s unit case volume had expanded by 22% while PepsiCo’s development in the quarter was about 19%.

“This is possibly the first time that production lines have been halted in a season for a prolonged period because of lack of demand and over supply,” said a beverage industry official.

Coca-Cola has 23 company-owned plants, 22 are operated by franchisees. Additionally, it has 11 contract packing units too. On the other hand, PepsiCo has 36 beverage bottling plants - 23 of these are owned by franchisees.

17

Due to lack of demand, huge amounts of unsold stocks are getting collected. This has led to the companies pushing these products in modern trade (at least in metros). Since the rains have compelled people to stay indoors, impulse purchase of soft drinks through ‘kirana stores’ have also been hit. Both companies are now hoping to increase sales via modern trade channels - where consumers purchase grocery in bulk and less as impulse purchases.Source: N.Namazi | Tue Sep 21, 2010http://www.businessreviewindia.in

Cola wars go mobile

NEW YORK: PepsiCo and Coca-Cola have both introduced new mobile marketing programmes, each using location-based services to engage consumers.For its part, PepsiCo has partnered with Foursquare to offer members rewards premised on habits beyond "checking in" at a set time or place.If participants earn a "Gym Rat" badge, achieved by regularly exercising at sports centres, they could receive a bottle of SoBe Lifewater.Seth Priebatsch, SCVNGR's founder, suggested it was differentiated from a growing number of rivals as the aim is "to build the game layer on top of the world.""You use Foursquare, Gowalla and Twitter," he said. You do not use SCVNGR - you play it."Coke Zero has also sponsored a "location-based" game tied to the film Tron: Legacy, following the actual movements of players via wireless handsets."At the moment, if you want to create amazing marketing, then you've got to be in the mobile space," Jude Brooks, Coca-Cola's UK and Ireland interactive manager, said at a recent conference."I think mobile marketing is going to transform the way that we connect and communicate with our consumers. Its opportunity is immense. It will run across all different channels of marketing.

18

"The power it gives us in terms of evaluating ROI, and engaging in that one-to-one dialogue with consumers, is phenomenal." 

Source: Fast Company, Mobile Marketing Magazine, Mashable; additional content by Warc staff, 23 November 2010

How to Win in Emerging MarketsVillage roads can be impassable, home cooking is still a way of life, product prices can be below the cost of production in developed markets, and local products often have generations of loyal customers. Nevertheless, emerging markets in Asia, Latin America and Eastern Europe are delivering some of the strongest revenue and profit growth for global makers of fast-moving consumer goods — everything from snacks to toothpaste — despite concerns that lower prices translate into lower profits.Emerging-market leaders like Coca-Cola, Uni-lever, Colgate-Palmolive, Groupe Danone and PepsiCo earn 5% to 15% of their total revenues from the three largest emerging markets in Asia: China, India and Indonesia. The story is similar in Russia and Eastern Europe, where these companies often dominate their target categories and routinely exceed internal corporate benchmarks for profitability. And the trend is likely to continue: The gross domestic product of emerging markets equaled the gross domestic product of advanced nations for the first time in 2006, with much of the growth coming from the “BRICET” nations — Brazil, Russia, India, China, Eastern Europe and Turkey.

http://www.hinduonnet.com/thehindu/biz/2002/06/10

Coca Cola, Pepsi come together at FFI ‘09Satish Shankar, Charles Ormiston, Nicolas Bloch, Robert Schaus and Vijay Vishwanath

19

The second edition of the two-day Food Forum India 2009 (FFI ‘09) in Mumbai to start tomorrow will bring the beverages majors Coca Cola and Pepsi together. In the country’s largest food event to showcase ideas and innovations for the food and grocery business, while Pepsi stands as the beverage partner of the event, Coca Cola comes as the title sponsor for the Coca Cola Golden Spoon Awards, Images awards for excellence in food retailing.

Further, Praveen Someshwar, head of bottling operations, PepsiCo India will also share his thoughts on ‘Macro Trends: How they impact our business?’. Moreover, Samudra Bhattacharya, director, organised trade, PepsiCo India will also feature at the open conclave with food brands & retailers during FFI ’09.

Talking more about the FFI ’09, Atul Singh, president and CEO, Coca-Cola India, said "‘Convenience and variety are fuelling the growth of India’s food industry. In-addition, the potential unleashed by the processed food industry in terms of employment and revenue generation is also promising. At Food Forum, it will be encouraging to witness speak

Source: IndiaRetailing Bureau

Coca-Cola's continuing saga on equity

IT SEEMS to be the karma of Coca-Cola Corporation that in India it has to wage a war on two fronts. The first is with its archrival PepsiCo against whom it has to joust constantly to capture the market or retain its territory. The other war is more serious and is with the Government over equity.

The equity war is special to India. There is a surprising recurrence of dispute over equity. Times have no doubt changed. Gone are the days of FERA and the horrors of equity dilution. The FERA itself has been turned into FEMA and become a limp leaf. There is more

20

openness to foreign investment and greater indulgence towards equity. And yet, Coca-Cola has this war in full public gaze. Is it a paradox or is there something rotten in Delhi? Neither. It seems more an instance of promises made during nuptials souring after the wedding. We begin with the FERA years.

When the FERA came into force on the January 1, 1974, the Government and the Reserve Bank of India were vested with powers to regulate foreign equity in companies operating in India. Companies in low-priority areas such as consumer goods could continue with 40 per cent equity. Coca-Cola came under this category.

Dilution was brought about through divestitures, new issues or a mixture of both. More than a thousand companies complied with the FERA. Dilution under FERA triggered the stock market boom of the 1970s. We thus have two extremes defying short-term solutions. Though legally Coca-Cola is bound by the collaboration agreement, there are limits to state action against big corporations such as Coca-Cola close to the White House. Thus, we would see a war of words and Coke wanting more — Coke mange mores!

http://www.hinduonnet.com/thehindu/biz/2002/06/10

Sachin against Dhoni in Cola war?

Beverage giant Coca-Cola is currently discussing an endorsement deal with Sachin Tendulkar ahead of the upcoming ICC Cricket World Cup. If Sachin comes on board for Coke, a possibility of a high-profile off-field battle between the master blaster and his captain MS Dhoni is highly probable.

A celebrity management official familiar with the event said: “Coke is very keen to have Tendulkar on board”. Even though no contract has been signed yet between Coca-Cola and the cricketer, industry executives have confirmed that a short-term deal could take place soon.

21

But, sports management firm, World Sports Group (WSG), (that represents Tendulkar) and Coca-Cola have declined to comment on this issue. “We are always in discussions with any number of leading celebrities with regard to their support of our brands and initiatives, but we only announce formal agreements after they are signed” a Coca-Cola India spokesman said.

Harish Krishnamachar, senior VP of WSG added: “We are not in a position to discuss commercial terms for Sachin. Once a sponsor is signed, we will let our client announce it”

Not easy to get the Little Master The ICC World kicks off in February next year and Tendulkar could be playing his last world cup. Plus, he is still immensely popular among fans. Coca-Cola wants to bet on the star player to make sure that PepsiCo’s huge ad campaign with Dhoni does not steal all the gains at the big event – perhaps the largest for all marketers.

Dhoni has already signed a high-profile endorsement deal with United Breweries for 3 years for Rs. 26 crore & also renewed his existing deal with Maxx Mobile for 7 years valued at Rs. 29 crore!Source: N.Namazi | Wed Dec 15, 2010

III. RESEARCH METHODOLOGY

22

Data which is required for this study is based on both primary and secondary data.

Primary Data:Primary data is collected from the retailers through a

structured questionaire. It includes the first hand information from the outlets. It can be viewed as a survey. The questionnaire was especially designed to find out the market share of Coke and Pepsi Companies comparatively in these clusters. Through this information we can get the strengths and weaknesses of Coke and Pepsi Companies in those particular clusters. The total primary data was collected from the following clusters.

Thiruverumbur,Palpanai,Kalanai Mathur,Gundur,Subramaniapuram,KK nagar,Gandhi

Nagar AnnaUniversity,Bharathidasan

University,Mandaiyur,Mathur,OFT Chatram Bus Stand Samayapuram Central Bus Stand AnnaMalai Nagar Tvs tollgate,Kajamalai Canonment Petavathalai

The survey was first started at Thiruverumbur and Kalanai on 17/02/11 and completed on 25/02/11 with Central Bus stand. Investigator personally went to every outlet and asked the total details, which are in the questionnaire and filled those questionnaires. Some of the retailers denied giving the details, then the investigator waited there with patience and collected all the

23

data from that retailers. In the survey the investigator learned a lot and collected the useful information and also got good experience in the market field and came to know many things which are not in our books through this survey. The investigator almost covered all the retail outlets which are situated in these three clusters and collected the correct information.

Secondary Data:Secondary sources include the information collected from the

annual reports, published and unpublished records of the company .various books and journals were referred. Internet was also being used for collecting the relevant data which is not available in the books. Some of the websites are:

CocaColaIndia.com, BeverageMarket ingCorporat ion.org, CanadeanBeverageDigest .com, Myenjoyzone.comAnd also from company records and data of AC Nei lson’s research etc. to have a comprehensive knowledge about the beverage industry and Hindustan Coca Cola Beverages Pvt . Ltd.

After gathering the data from those two sources the data was analyzed and the important information was extracted for the use of study.

Data Analyzing Tools:After gathering the data from the Primary and secondary

sources the data were tabulated using a structured format, was analysed using some calculations to sum up the total information. The resultant data has been used in tabular format to prepare the graphical representations. After the graphical representation the

24

interpretation was done to each and every graph using the Microsoft word and Microsoft Excel. Interpretation is the total essence of the total study. The conclusions were made using the interpretations.

IV. A BRIEF INSIGHT: BEVERAGE INDUSTRY IN INDIA

In India, beverages form an important part of the l ives of people. It is an industry, in which the players constantly innovate, in order to come up with better products to gain more consumers and satisfy the existing consumers.

25

Beverage industry in India

Market shares (%) of soft drinks in India(Source: - www. Google.com – Images)

Carbonated Non-Carbonated

Cola Non-Cola Non-Cola

Beverages

Alcoholic Non-Alcoholic

26

The beverage industry is vast and there various ways of segmenting it , so as to cater the right product to the right person. The different ways of segmenting it are as follows:

Alcoholic, non-alcoholic and sports beverages Natural and Synthetic beverages In-home consumption and out of home on

premises consumption. Age wise segmentation i .e. beverages for kids, for

adults and for senior citizens Segmentation based on the amount of

consumption i .e. high levels of consumption and low levels of consumption.

If the behavioural patterns of consumers in India are closely noticed, it could be observed that consumers perceive beverages in two different ways i .e. beverages are a luxury and that beverages have to be consumed occasionally. These two perceptions are the biggest challenges faced by the beverage industry. In order to leverage the beverage industry, it is important to address this issue so as to encourage regular consumption as well as and to make the industry more affordable.

Four strong strategic elements to increase consumption of the products of the beverage industry in India are:

The quality and the consistency of beverages needs to be enhanced so that consumers are satisfied and they enjoy consuming beverages.

27

The credibil ity and trust needs to be built so that there is a very strong and safe feeling that the consumers have while consuming the beverages.

Consumer education is a must to bring out benefits of beverage consumption whether in terms of health, taste, relaxation, stimulation, refreshment, well-being or prestige relevant to the category.

Communication should be relevant and trendy so that consumers

The beverage market has sti l l to achieve greater penetration and also a wider spread of distribution. It is important to look at the entire beverage market, as a big opportunity, for brand and sales growth in turn to add up to the overall growth of the food and beverage industry in the economy.

28

IV.1 SOFT DRINK MARKET IN INDIA

Today India is one of the most potential markets, with population of around 900 mill ion people, the Indian soft drinks market was only of 200 cases per year. This was very low even compared to Pakistan and Phil ippines. Population and potential market are two major reasons for major multinational companies of entering India. They feel that a huge population coupled with low consumption can only lead to an increase in the soft drink market. Another increase in the sale of soft drinks in the scorching heat and the climate of India, which istogether have contributed to a 30% growth in the soft drinks industry. If the demand continues growing at the same rate, within two years the volume could touch 1 bil l ion cases. All these factors are the reasons for the entry two giant of the soft drink industry of the world to enter the Indian market. These two giants Pepsi and Coca-Cola, Themselves share 96% of the soft drink market share. Rest is shared by Cadbury’s Schweppes, Campa Cola and other soft drink brands. But was the scene same 20 years ago? The answer is No. 1970 was the year of pure soft drinks Campa Cola and Parle people (Thums Up and Limca).

29

Soft drink consists of a f lavour base, sweetener and carbonated water. In general terms non-alcoholic drinks are considered as soft drinks this name soft drink was given by Americans as against hard which is mainly alcoholic.The major participants involved in the production and distribution of soft drink are concentrate and syrup producers, bottlers and retail channel. Concentrate producers manufacture basic soft drink flavours and retail channel refers to business location that tells or serves the products directly to consumers.

Soft drink is not a product, which a person plans to buy before hand, but is an impulse purchase. Lots of sale depends upon the strength of merchandizing done at the point of sale. It all begin in 1977, a change in central government led the exit of coca-cola which preferred to quit rather diluting its equity to 40% in compliance with the Foreign Exchange Regulation Act (FERA). The first national cola drink to pop up was double seven. In the meantime, Pure Drinks, Delhi on coke’s exit, switched over to Campa Cola.

The beginning of 1980’s saw the birth of another cola drink, Thums Up, Parle the Gold spot people, launched it in 1978-79, as “Refreshing Cola”. By the mid-eighties Mc Dowells launched Thril l , and by the late eighties there was Double Cola, which entered in India market, as a NRO-run outfit with its plant in Nasik (Maharashtra), in 1978 Parle, Indian soft drinks market (share 33%) with its gold spot and Limca brands. Later Thums Up also started Thums Up. At the same time the threat to the Indian soft drinks was that of fruit drinks. In 1988, fruit drinks market was valued at Rs. 40 crores and grew at the rate 20%.

30

Coca-Cola entered Indian by buying up to 69% of the 1,800 crores soft drink market (i .e. 5 Parle Export brands of Thums Up’s, Limca, Gold spot, Citra & Maaza). Today the scene has changed making it a direct battle between two giant Coca-Cola and Pepsi. The picture will become clearer by looking at the India market shares in the beverage industry.

One of the strongest weapons in Coke armoury is the flexibil ity it has empowered its people with. In Coke every employee, may he be a manager or salesman, have an authority to take whatever steps he or she feels will make the consumers aware of the brand and increase its consumption. Thus Coke believes in establishing and nurturing creditabil ity of the salesman and making commitment to grow business in accounts. All these factors together led to a high growth in the Indian market and constantly increasing market share.

31

IV.2 HINDUSTAN COCA-COLA BEVERAGES PRIVATE LIMITED (HCCBPL)

ABOUT THE COMPANY

Every person who drinks a Coca-Cola enjoys a moment of refreshment and shares an experience that mill ions of others have savoured. All of those individual experiences combined have created a worldwide phenomenon – a truly global brand. On the distribution front, 10-tonne trucks, open-bay three-wheelers that can navigate the narrow alleyways of Indian cities, ensure availabil ity of Coke brands in every nook and corner of the country. The company-owned Bottl ing arm of the Indian Operations, Hindustan Coca-Cola Beverages Private Limited is responsible for the manufacture, sale and distribution of beverages across the country .

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 Regulation Act (FERA) which governed the operations of foreign companies in India. Coca-Cola re-entered the Indian market on 26 t h

October 1993 after a gap of 16 years, with its launch in Agra. An agreement with the Parle Group gave the Company instant ownership of the top soft drink brands of the nation. With access to 53 of Parle’s plants and a well set bottl ing network, an excellent base for rapid introduction of the Company’s International brands was formed. The Coca-Cola Company acquired soft drink brands l ike Thumps Up, Gold-Spot, Limca, Maaza, which were floated by Parle, as these products had achieved a strong consumer base and formed a strong brand image

32

in Indian market during the re-entry of Coca-Cola in 1993.Thus these products became a part of range of products of the Coca-Cola Company.

In the new liberalized and deregulated environment in 1993, Coca-Cola made its re-entry into India through its 100% owned subsidiary, HCCBPL, the Indian bottl ing arm of the Coca-Cola Company. However, this was based on numerous commitments and stipulations which the Company agreed to implement in due course. One such major commitment was that, the Hindustan Coca-Cola Holdings would divest 49% of its shareholding in favour of resident shareholders by June 2002.

Coca-Cola is made up of 7000 local employees, 500 managers, over 60 manufacturing locations, 27 Company Owned Bottl ing Operations (COBO), 17 Franchisee Owned Bottl ing Operations (FOBO) and a network of 29 Contract Packers that facil itate the manufacture process of a range of products for the company. It also has a supporting distribution network consisting of 700,000 retail outlets and 8000 distributors. Almost all goods and services required to cater to the Indian market are made locally, with help of technology and skil ls within the Company. The complexity of the Indian market is reflected in the distribution fleet which includes different modes of distribution, from 10-tonne trucks to open-bay three wheelers that can navigate through narrow alleyways of Indian cities and trademarked tricycles and pushcarts.“Think local, act local”, is the mantra that Coca-Cola follows, with punch l ines l ike “Life ho to Aisi” for Urban India and “Thanda Matlab Coca-Cola” for Rural India. This resulted in a 37% growth rate in rural India visa-vie 24% growth seen in urban India. Between 2001

33

and 2003, the per capita consumption of cold drinks doubled due to the launch of the new packaging of 200 ml returnable glass bottles which were made available at a price of Rs.5 per bottle. This new market accounted for over 80% of India’s new Coca-Cola drinkers. At Coca-Cola, they have a long standing belief that everyone who touches their business should benefit, thereby inducing them to uphold these values, enabling the Company to achieve success, recognition and loyalty worldwide.

Figure 6: Locations of COBO, FOBO & Contract Packaging in India. (Source: - www. Google.com – Images)

IV.3 PEPSICO COMPANY PROFILE

34

Pepsi has been bringing fun and refreshment to consumers for over 100 years. From its humble beginnings over a century ago, Pepsi-Cola has grown to become one of the best-known, mostloved products throughout the world. Today, the company continues to innovate, creating new products, new flavors and new packages in varying shapes and sizes to meet the growing demand for convenience and healthier choices. The various product of Pepsi available in India are Pepsi Pepsi is the most saleable product of PepsiCo. It is popular in the younger generation all around the world. Diet Pepsi:With its light, crisp taste, Diet Pepsi gives you all the refreshment you need -with zero sugar, zero calories and zero carbs, Light, Crisp, refreshing. Mirinda: Mirinda was originally produced in Spain. Mirinda is a brand of soft drink available in fruit varieties including orange, grapefruit, and apple, strawberry, pineapple, banana, and passionfruit and grape flavors. The orange flavor of Mirinda represents the majority of Mirinda sales worldwide. 7up: 7 Up is a brand of a lemon-lime flavored non-caffeinated soft drink. The rights to the brand are held by Dr Pepper Snapple Group in the United States, and PepsiCo (or its licensees) in the rest of the world. Mountain Dew: Mountain Dew (also known as Mtn Dew as of late 2008) is a soft drink distributed and manufactured by PepsiCo. Mountain Dew (and its energy drink counterpart known as AMP) often incurs the disapproval of health experts due to its relatively high caffeine content for a soft drink or energy drink. Pepsi Blue: Pepsi Blue is a berry-flavored soft drink produced by PepsiCo. It was launched in India near the cricket world cup to associated the Pepsi with the Indian people as Blue is official colour of Indian cricket team. The flavor of Pepsi Blue was thought by drinkers to be similar to cotton candy with a berry-like aftertaste (it resembled that of blueberries or raspberries). Slice: Slice is a line of fruit-flavored soft drinks manufactured by PepsiCo and introduced in 1984. Varieties of Slice have included Apple, Fruit

35

Punch, Grape, Passion fruit, Peach, Mandarin Orange, Pineapple, Strawberry, Cherry Cola, "Red", Cherry-Lime, and Dr Slice.

36

IV.4 MARKET SHARE IN INDIAThese two soft drink companies (Coca cola & Pepsi) acquire the major share of the soft drink Industry and always remain in the war to get the majority of market share with each other. These companies always be pioneer in using various innovative technology and method to become the market leader. These companies present the world new innovative ways of doing the marketing and how take advantage of various opportunities and how to use your strength in a better way. In India currently colas (carbonated soft drinks) products comprises 61% and non-cola segment constitutes 36% of the total soft drink market whereas 2% is covered under other various drinks like apple juice, cold coffee, cold tea etc.

IV.5 OPPORTUNITY IN INDIAN MARKETAs in India, around 120 billion litres of beverage is consumed every year, of which only 5 percent are in packaged segment and also if

we compare per head consumption of soft drink in India to America it is 6 is to 700. So looking at these aspects we can say that there is lot of scope for these two soft drink giant in India to expand their

market as the stakes are huge in Indian market

37

IV.6 PRODUCT PROFILE

Flavour Ingredients Pack Product Company Cola Cola Flavour

carbonated water sugar

200Ml.300Ml.500Ml.1 Litre1.5 Litre2 Litre

Coke, Thumsup

Pepsi

Coca-Cola

Pepsi

Orange Orange Flavour + Carbonated Water+ Sugar

200Ml.300Ml.500Ml.1 Litre1.5 Litre2 Litre

Fanta

Mirinda

Coca-Cola

Pepsi

Fruit Juice

Mango Pulp+ Treated water+ sugar

250 ML Maaza

Slice

Coca-Cola

Pepsi Cloudy Lemon

Lemon Flavour + Carbonated Water+ Sugar

200Ml.300Ml.500Ml.1 Litre1.5 Litre2 Litre

Limca

Mirinda Lemon

Coca-Cola

Pepsi

Clear Lemon

Lemon Flavour+ Carbonated Water + Sugar

200Ml.300Ml.500Ml.1 Litre1.5 Litre2 Litre

Sprite

7’UpDew

Coca-Cola

Pepsi

38

IV.7 MARKETING STATEGIES OF COCA-COLA

a)PRODUCT Coke was launched in India in Agra, October 24, in '93',

soon after its traditional all Indian launch of its Cola. At the sparking new bottling plants at Hathra near Agra. Coke was back with a bang after its exit in 1977. Coke was planning to launch in next summer the orange drink, Fanta-with the clear lemon drink, sprite, following later in the year.Coke's product line includes, Coca-Cola, Thumps Up, Fanta, Maaza, Sprite, Club Soda, 7-up,Limca,Fanta apple, Diet Coke.

39

PACKAGINGCoca-Cola India Limited (CCIL) has bottled its Cola drink in

different sizes and different packaging i.e., 200 ml bottle, 300 ml. Bottle, 330 ml. Cans, 500 ml. And bottles of 1 and 2 litre.

PRODUCT POSITIONINGOne important thing must be noticed that Thumps Up is a

strong brand in western and southern India, while Coca Cola is strong in Northern and Eastern India. With volumes of Thumps up being low in the capital, there are likely chances of Coca Cola slashing the prices of Thumps Up to Rs. 5 and continue to sell Coca Cola at the same rate. Analysts feel that this strategy may help Coke since it has 2 Cola brands in comparison to Pepsi which has just one.

Thumps Up accounts for 40% of Coca Cola Company’s turn over, followed by Coca Cola which has a 23% share and Limca which accounts for 17% of the turn over of the company. We will sell whatever consumers want us to". Coca Cola India has positioned Thumps up as a beverage associated with adventure because of its strong taste and also making it compete with Pepsi as even Pepsi is associated with adventure youth.

b) PRICEThe price being fixed by industry, leaving very little role for

the players to play in the setting of the price, in turn making it difficult for competitors to compete on the basis of price.The fixed cost structure in Carbonated Soft Drinks Industry, and the intense competition make it very difficult to change or alter the prices. The various costs incurred by the individual companies are almost unavoidable. These being the costs of concentrates, standard bottling operations, distributor and bottlers commissions,

40

distribution expenses and the promotional and advertising expenditure (As far as Coke is concerned, it had to incur a little more than Pepsi as Pepsi paved its way to India in 1989 while Coke made a comeback in 1993.)

Currently a 300 ml. Coke bottle is available for Rs10 the 330 can was initially available for Rs. 15 and now Rs.20. The prices of 500 ml, 1 litre. And 2ltr being Rs20 Rs.35 and Rs.50 respectively (according to the current survey).

c) PLACECoke may have gained an early advantage over Pepsi

since it took over Parle in 1994. Hence, it had ready access to over 2, 00,000 retailer outlets and 60 bottlers. Coke was had a better distribution network, owing to the wide network of Parley drinks all over India. Coke has further expanded its distribution network.

Coke and its product were available in over 3, 00,000 outlets (in contrast with Pepsi's 2, 75,000). Coke has a greater advantage in terms of geographical coverage.

Coke and Pepsi have devised strategies to get rid of middlemen in the distribution network. However, 50% of the industry unfortunately depends on these middlemen. As of now, around 100 agents are present in Delhi. Bottlers of the 2 multinationals have strongly felt the need to remove these middlemen from the distribution system, but very little success has been achieved in doing so.d) PROMOTION

It must be remembered that soft drinks purchases are an "impulse buy low involvement products" which makes promotion and advertising an important marketing tool. The 2 arch rivals have spent a lot on advertising and on promotional activities.

According to Paul Stobart, Advertising encourages customers to recognize the quality the company offers. Price promotions often produce short-term sales increases.Coca Cola has entered new markets and also developing market economics (like India) with much-needed jobs.

41

IV.8 PEPSI’S MARKETING STRATEGIES

Pepsi’s approach is radically different from that of Coke; Pepsi has gone in for concentration segmentation. Pepsi has targeted the youth segment instead of trying to be something to all segments.

Pepsi has since beginning strove to achieve its international position as `a drink for the new generation’ in India. Helped by HTA’s forceful visuals and creative, Pepsi has been successful in positioning itself for the younger generation.

SELLING PROCESSPepsi has a very well managed selling system. It takes as lot of

care to ensure that the products (Pepsi bottles) are available to the consumers.

Pepsi soft drinks are produced in our plant in different SKUs (Stock keeping units) and distributed to our distributor and they further supply to the retailer. Sahibabad (GZB) has been divided around 14 routes which are called direct routes. For every route there is a Routs Agent. Route Agent moves with the company

42

owned truck and ensure that maximum shops are covered each day, so that regular supply of Pepsi soft drinks is made.

Routs agents take the order from the shopkeepers and then with the help of loaders they give the required number of crates to the retailer or shopkeeper & then move to next.

Our plants also have some agency in each rout. They supply in the areas where Pepsi’s trucks are not able to reach. These areas are called indirect-routes.

IV.9 SWOT ANALYSIS OF PEPSI AND COKE

STRENGTHSPepsi and Coke has been a complex part of world culture for a very long time. The products image is loaded with over-romanticizing and fun, this is an image many people have taken deeply to heart. Pepsi and Coke are the extremely recognizable brand, which is the greatest strength of them. Additionally there Bottling system is one of their greatest strengths. This allows them to the conduct business on a global scale while at the same time maintain a local approach. The bottling companies are locally owned and operated by independent business people who are authorized to sell product of these cola giant. PepsiCo and Coca cola are having the largest distribution network in the world, which is also there one of the greatest strength.

WEAKNESSESWeaknesses for any business need to be both minimized and monitored in order to effectively achieve productivity and efficiency in their business activities. Although the international sales are increases but there is getting a saturation evident through the stability in cola drink in USA market and moreover all over the world the customer preference for cola drink is shifting towards the

43

healthy drink is taking place. Being addictive of cola drink is also a health problem, because drinking of carbonated soft drink daily has an effect on your body also.

OPPORTUNITIESBrand recognition is the significant factor affecting Pepsi and Coke competitive position. Pepsi and Coke brand is known well throughout 94% of world today. As in developing countries the per head consumption of cola drink is very less which evident from taking example of India. In India per head consumption is only 6 bottles as compare to 700 bottles in USA and in Indian market only 5% of the beverage come under packaging. So looking at these data we can that for these two giant a lot of potential is there in developing market which is now also untapped.

THREATSCurrently, the threat of new viable competitors in the carbonated soft drink industry is not very substantial. The threat of Substitute, however, is a very real threat. The soft drink industry is very strong, but consumers are not necessarily married to it. Possible substitutes that continuously put pressure on both Pepsi and Coke include tea, coffee, juice, milk and hot chocolate. Eventhrough the Coca cola and Pepsi control nearly 40% of the entire beverage market, the changing health consciousness of the market could have a serious affect. Of course, both have already diversified into these markets, but still theseSubstitute will remain threat to them. Consumer buying power is also represents a key threat to the Pepsi and Coke.

44

V. DATA ANALYSIS & INTERPERTATION

The main part of the report i.e. Analysis part is covered in this chapter. Investigator conducted survey in 209 Retail outlets in 20 various areas. After conducting the survey, the total collected information has been interpreted using a structured format. The required information is derived from that format and later interpretation and analysis have been done using that information. This analysis part contains tables and graphical representation. Only histograms have been used in this graphical representation. We can understand the information easily through the graphs and can come to a conclusion from the final information from this chapter. Because of that reason this chapter is very important in the entire study of the project. Without this analysis and interpretation we can not give the essence of the study easily. This chapter is very useful to conclude the total survey and also can understand the position of the company and the opinion of the retailers and customers regarding the company.

This chapter is totally based on the primary data collected through the survey conducted on the retailers of various markets. This survey is also is very useful to the company also to understand and take the further steps to improve their performance and through that they can get a good market share in the soft drink industry. In this chapter the interpretation is also provided along with the analysis of the collected data. The company may get the

45

valuable information through this interpretation. Because of this reason the investigator has chosen this study.

V.1 DATA ANALYSIS

The total data collected in 20 areas in Trichy district of total of 200 retail outlets. They are given below:Table 5.1Respondents AnalysisCLUSTER RESPONDE

NT SIZEAREA Percentage

Cluster-1 31 Chatram Bus Stand 15

Cluster-2 34 Mathur,Sembattu,Gundur

16

Cluster-3 29 Central Bus Stand 14

Cluster-4 38 Samayapuram 18

Cluster-5 35 Anna Univ,Bharathidasan

Univ,OFT

17

Cluster-6 42 Cantonment 20

Total 209 100

Source: Interview Method

Interpretation: The table explains the sample size and the respondents in six clusters selected for the project work. Out of the 209 retail outlets, 31 outlets comprising 15 Percent of sample size are taken from Mathur,Gundur,Sembattu markets, 35 retail outlets comprising of 17 Percent of sample size from Anna Univ,Bharathidasan Univ,Mandaiyur market , 38 outlets comprising

46

of 18 from Samayapuram market,29 outlets comprising of 14 percent from Central bus stand,42 outlets comprising of 20 % from Cantonment and 29 outlets comprising of 14 % from Chatram Bus Stand respectively. It is concluded that most of the respondents (retail outlets) are selected from Trichy markets for conducting the study. All these six markets are adjacent to one another in same district. Because of this reason the retailers as well as the consumer’s behavior will be similar. Because of this reason we can understand the market that particular area well.

Study is conducted here because these are the local markets and will be useful to know the market condition of the residing area.

47

Table 5.2Types of Outlets in Trichy

S.No Types Outlets %1. E&D 77 372. Convenience 65 313. Grocery 67 324 Average 209 100

Source: Interview Method

Interpretation :It is found that, out of 209 outlets from Trichy market E&D outlets are 77 ,Convienence outlets are 65 and 67 grocery outlets which holds Coke and Pepsi in the respected market areas.

48

Table 5.3Availability of Coke and Pepsi in Mathur,Gundur,Sembattu Cluster:

S.No Availability Outlets Percentage

1. Free Entry 19 59

2. Exclusive 5 163. Competition

Exclusive8 25

Total 34 100

Source:Interview Method

Interpretation: It is found that in Mathur,Gundur,Sembattu clusters Free Entry are 19 outlets with 57 %,Exclusive Coke Outlets are 5 with 16% and Competion Exclusive are 8 with 25 %,Which shows that Both Coke and Pepsi Shares the Market areas.

49

Table 5.4:Availability of Coke and Pepsi in Anna University,Bharathidasan University,Mandaiyur,Mathur,OFT

S.No Availability Outlets Percentage

1. Free Entry 15 41

2. Exclusive 15 403. Competition

Exclusive7 19

Total 35 100Source:Interview Method

Interpretation: It is found that in Anna University,Bharathidasan University,Mandaiyur,OFT markets Free entry are 15 outlets with 41 %,Exclusive Coke outlets are 15 with 40 % and Competition Exclusive are 7 with 19 % which shows that Coke dominates with the exclusive outlets than the Pepsi outlets

50

Table 5.5 Availability of products in Chatram Bus StandS.No

Availability Outlets Percentage

1. Free Entry 7 29

2. Exclusive 15 483. Competition Exclusive 9 23

Total

31 100

Source: Interview Method

Interpretation: It is found that in Chatram Bus Stand market ,Free Entry outlets are 7 with 29 % ,Exclusive are 15 outlets with 48% and Competiton Exclusive 9 outlets with 23 %,which shows that Coca Cola dominates the market than Pepsi

51

Table 5.6Availability of Coke and Pepsi in Samayapuram

S.No

Availability Outlets Percentage

1. Free Entry 10 30

2. Exclusive 14 403. Competition Exclusive 9 27

Total

38 100

Source: Interview Method

Interpretation: In Samayapuram market Free Entry are 10 outlets with 30 %,Exclusive outlets are 14 with 40 % and Competition outlets are 9 with 27 % ,Coke is having more market but Pepsi also have a considerable market share

52

Table 5.7Availability of Coke and Pepsi in Central Bus Stand

S.No

Availability Outlets Percentage

1. Free Entry 15 47

2. Exclusive 10 313. Competition Exclusive 7 22

Total

29 100

Source: Interview Method

Interpretation: In Central Bus Stand market Free entry outlets are 15 with 47 % ,Exclusive are 10 with 31 % and 7 with 22 % respectively. This shows that Free Entry dominates more here and both the brands shares the market

53

Table 5.8Availability of Coke and Pepsi in CantonmentS.No

Availability Outlets Percentage

1. Free Entry 24 53

2. Exclusive 18 403. Competition Exclusive 3 7

Total

42 100

Source: Interview Method Interpretation: It is found that in Cantonment market Free entry outlets are 24 with 53 %,Exclusive outlets are 18 outlets with 40 %and competition exclusive are 3 with 7 % and here Coke and Pepsi products are available in most outlets but Coke holds higher in terms of Exclusive outlets

Table 5.954

Types of outlets found in Trichy Cluster:S.No Brands Retail outlets Percentag

e1 E & D 77 39

2 Convenience 65 31

3 Grocery 67 32

Total 209 100

Source: Interview Method

Interpretation: It is found that in Types of Outlets in Trichy market E&D outlets are 77 with39 %,Convenience outlets are 65 with 31 % and grocery outlets are 67 with 32 %,So E&D outlets dominates more in all the markets

55

Table 5.10Coke and Pepsi available in E & D:

S.No Brands Retail outlets Percentage

1 Coke 45 58

2 Pepsi 32 42

Total 77 100

Source : Interview Method

Interpretation: In E&D outlets Coke have 45 outlets with 58 % and Pepsi with 32 outlets with 42%,Coke have more outlets in E&D as this outlets are more in no. but Pepsi also have considerable outlets.

56

Table 5.11Availability of Coke and Pepsi in Convienence outlets

S.No Brands Retail outlets Percentage

1 Coke 24 38

2 Pepsi 39 62

Total 65 100

Source:Interview Method

Interpretation: In Convienence outlets Coke have 24 outlets with 38 % and Pepsi have 35 outlets with 62 % ,Pepsi Dominates in Convienence outlets and it is a oppurtunity for Coke to tap the market.

57

Table 5.12Availability of Coke and Pepsi in Grocery outlets

S.No Brands Retail outlets Percentage

1 Coke 24 43

2 Pepsi 39 57

Total 65 100

Source: Interview Method

Interpretation: It is found from table 5.12 that in Grocery outlets in Trichy Pepsi dominates with 57% in 39 outlets and coke is available only in 24 outlets with 43%.In this domain Pepsi have more share than coke products

58

Table 5.13Availibility of Sales Generating Assest(SGA) in Trichy outlets:

S.No SGA Retail outlets Percentage

1 Coke 113 462 Pepsi 85 353 Both Coolers 30 124 Own Coolers 18 7

Total 209 100

Source:Interview Method Interpretation: In Sales Generating Asset in Trichy Market KO Coolers are in 113 outlets with 46 % and PC Coolers are in 85 outlets with 35 % and both coolers are in 30 outlets with 12 % and own coolers of the retailers are 18 with 7 %.In several Clusters

59

Coke dominates the market but Pepsi is also in available in all markets.

60

Table 5.14Satisfaction levels with Coca Cola Company’s Service (Supply):

S.No Market Highly satisfied

Satisfied Not satisfied

1 Mathur,Gundur,Sembattu

20 11 3

2 Anna Univ,Bharathidasan Univ,Madaiyur,OFT

14 16 5

3 Chatram Bustand

21 10 0

4 Samyapuram 17 21 2

5 Central Bus Stand

9 20 0

6 Cantonment 15 23 4

Average 16 17 .25

Source: Interview Method

Interpretation: It is found that in all these areas some of the retailers are highly satisfied with the Coke service and majority number of the retailers is satisfied with the service of the Coco Cola Company. On an average of all the markets most of the retailer’s i.e.48% is highly satisfied with the Coke service (supply), 51% retailers are satisfied with the service of the Coca Cola and the remaining 1% is not satisfied with the service of the Coca Cola Company. So it is concluded that the retailers are satisfied with the service (supply) of the Coca Cola Company.

61

Table 5.15

62

Retailer’s opinion on Trade Schemes offered by Both Companies in Various Clusters:S.No Market Pepsi Coke1 Mathur,Gundur,Semb

attu20 14

2 Anna Univ,Bharathidasan Univ,Mandaiyur

17 18

3 Chatram Bus Stand 7 22

4 Samayapuram 15 23

5 Central Bus Stand 15 14

6 Cantonment 11 31Source: Interview Method

Interpretation: It is found from table that in all the areas majority of the retailers agreed with the Coke when compared to Pepsi. On an average most of the retailers i.e.56% voted for Coke Company for its trade schemes offered to the retailers and the remaining 44% of the retailers are voted for Pepsi Company for its trade schemes offered to the retailers. So it is concluded that Coke Company dominated Pepsi in these areas in terms of the trade schemes offered to the retailers.

63

Table 5.16Signage outlets of Coke and Pepsi in Trichy

64

S.No Product No. of Outlets

%

1 Coke 22 40

2 Pepsi 33 60Source: Interview Method

Interpretation: It is found that in Signage f the outlets Pepsi have 33 outlets with 60 % and 22 outlets with 40 % ,Here Pepsi dominates more than Coke in acquiring the signage outlets

V.2. The comparison of Coke and Pepsi in the surveyed areas:

The survey is conducted in the six market areas existing in Trichy District. According to the survey conducted, both the

65

companies Pepsi and Coke have the same (similar) market share. When compared to Pepsi, Coke has some high market share according to the survey. Many theses are declaring the different market shares of the both companies but nobody can decide the exact market shares of the two companies, because these shares are not stable and rapidly changing.

When we compare the brands availability of both companies in these six markets, Coke brands availability is more when compared to Pepsi Company Brands. When we analysis the reason for this, Pepsi Company is not concentrating on all their brands and concentrating on the most selling brands and they are supplying those brands more. In case of Coke Company, it is concentrating on all their brands that mean they are trying to satisfy all the customers by providing/supplying all its products.

When analyzing different markets according to Free Entry,Exclusive of Coca Cola and Competion Exclusive Coke dominates in Chatram Bus Stand,Samayapuram,Cantonment,OFT, Anna University,Bhrathidasan University while in Mathur,Gundur,Central Bus Stand Pepsi have more market when comparing with Coca Cola brands

In service (supply) to the retailers, most of the retailers (48%) are highly satisfied, 51% retailers are satisfied (moderate) and the remaining 1% retailers are not satisfied with the service of the Coca Cola Company’s service. In Exclusive outlets of Coca Cola the supply is satisfactory and when comparing with free flowing of Coke and Pepsi, Pepsi’s supply is more good than Coke

The schemes offered to the retailers are important in case of all the products, because retailers are the makers and breakers of the company’s profits. When we come to the soft drink industry it has its own importance. In the surveyed areas on an average 55% of the retailers are satisfied with the trade schemes offered by the Coke Company and the remaining 45% of the retailers are satisfied with the Pepsi Company’s trade schemes offered to the retailers. That means Coke is providing good trade schemes like with every case of cool drinks on bottle free along with the general profits,

66

free gifts, appreciations to the retailers who sold more drinks in that market area etc. are good when compared to Pepsi Company. To improve the good will and loyalty of the retailers Pepsi Company has to adopt the new strategies to develop the new schemes.

To know whether a retailer is selling the Pepsi Company’ products or Coke Company’s and to promote the sales of their Company drinks the companies are providing the company’s Visi Coolers (from which all the drinks which are kept in the Cooler are visible to outside through a glass door) to the retailers for free of cost. Only 35% of the retailers are using the Pepsi Companies Visi Coolers and 46 % of the retailers are using the Coke and some retailer’s use both coolers with 12 % and other coolers are 7 % in their retail store. From this we can understand that when compared to Pepsi Company, Coke Company provides more no. of Visi Coolers to the retailers. To improve the sales of Pepsi Company they have to provide the Visi Coolers to the retailers. By observing all the above things we can’t determine who the market leader of the soft drinks industry, Pepsi or Coke. This is fluctuating continuously in the market.

VI. FINDINGS

1. Coke Company dominated Pepsi Company in terms of availability of its brands in Chatram Bus Stand, Samayapuram and Cantonment Clusters

67

2. Pepsi Company dominated Coke Company in Mathur and Gundur Clusters and Coke dominated Pepsi in Narasannapeta Cluster in terms of top selling soft drink brands.of its availability of products.

3. Coca Cola dominated in E & D and Grocery outlets in terms of availability of brands

4. Pepsi Company dominated Coke Company in Convenience type outlets

5. Most of the retailers (56%) require the daily supply (service) from the soft drink Companies, which indicates the high sales of the soft drinks.

6. Most of the retailers are highly satisfied with the service (supply) of Coca Cola Company.

7. The service of Coke Company is moderate when compared to Pepsi Company, so here Pepsi dominated Coke Company in terms of Service (supply) to the retailers.

8. Coke Company dominated Pepsi Company in terms of trade schemes offered to the retailers.

9. Coke Provides Cooler to all the outlets which are giving high volume of products and so that results in increasing sales .

10. The Signage Outlets are more in no. for Pepsi than for Coke and that results in monopoly of sales for a specified brand i.e Pepsi

68

VII. CONCLUSION

The project helped to gain experience for the study of marketing aspects in the world. Through this study it is learned of how to approach a customer or any other people and how to explain our view to them.

Soft drink industry is a vast growing industry when compared to many other industries. This industry is a place where two major players are there in the world. Coca Cola Company is one of them.

69

Lot of valuable information regarding the company and also the retailers, has been collected from the survey, which helped to understand the real problems faced by the marketers to distribute and also make retailers to sell the company’s products in the market. It is difficult to do the marketing in the present scenario to get success in the marketing field. From the analysis of the data collected from the retailers got some important findings regarding the company and the industry. For those findings some of the suggestions made to the company were really applicable for the growth and benefit for the company in order to increase its market share and to become the market leader in the soft drink industry, because a large number of competitors craving for the same market Thus, finally it can be said that the Company needs a lot of improved distribution channel management activities along with various promotional strategies for the customers to get the top position in the soft drink industry Interpretation is the result of the total study. Based on the interpretation the comparative study between Coke and Pepsi was done. From this interpreted information we can understand the position of the Pepsi Company and Coke Company Comparatively in the six surveyed clusters.

VIII. SUGGESTIONS

1. Coca Cola Company has to supply their entire product sufficiently and regularly in time to the retailers in these clusters. So that the loyalty of the retailers will be increased.

2. The Cola Cola Company has to maintain the top position and has to try to increase their performance in Chatram Bus Stand and Samayapuram and Cantonment cluster and it has to evaluate the reasons for not capturing the top position in Mathur,Gundur,Central Bus Stand,Madaiyur clusters.

70

According to the reasons the company has to take the steps to reach the top position.

3. As most of the retailers require the daily supply, the Company has to supply the drinks daily to the retailers, so that they can serve the consumers according to their requirements. If they don’t supply the drinks daily and sufficiently the sales will be decreased.

4. As the retailers are moderately satisfied with Coca Cola Company’s service when comparing with Pepsi Company’s service (supply), It can improve the quality of Coca Cola Company’s service to increase the sales of the company.

5. The trade schemes offered by Coca Cola Company to the retailers should be increased and also profitable to the retailers. If they are satisfied with the offers then they will promote the drinks more and the profit will be more to the company.

6. Coca Cola Visi coolers are supplied very less to the retailers when compared to Pepsi. The company has to supply more Visi coolers to the retailers to increase their business. The company also has to check the condition of the Visi coolers regularly and if any problems are there then they have to rectify those problems.

7 . The Signage outlets are less in number for Coca Cola when comparing with Pepsi and so the market must be tapped to increase the monopolistic strategy with the outlets in the market which induces in more sales.

71

IX. BIBLIOGRAPHYBooks Referred S.No Author Title Publisher Volume Year

1. Philip kotler Marketing Prentice, 12th 2005 Management Hall of India 2. VS Ram Swami Marketing Mac Millan 3rd 2005 3. Chunawalla S.A Advertising Hall of India 12th 2005 Journals Referred Journal Name Volume Month Year________________________________________________________

72

Indian Journal of Marketing XXXVIII May 2008The ICFI journal of Marketing Management VI, No.1 February 2007

Web Sites Referred:

www.cocacola.com www.hindustancocacolabeverages.com www.coke.com www.scribd.com www.justdrinks.com

73