XAVIER INSTITUTE OF SOCIAL SERVICE Dr. Camil Bulcke Path, Ranchi-834001

A project report on

Marketing in Practice

Of

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Under the supervision of

Prof. A.R. Bodra

H.O.D. Marketing

Submitted by:

Faisal Zishan 09

Praveer Dayal 28

Shreya Bajaj 38

Shishir Kumar 57

CONTENTSSl No

1 COMPANY PROFILE 32 COCA COLA IN INDIA 33 HINDUSTAN COCA COLA BEVERAGES PVT LTD 54 HIERARCHY OF HCCBPL JHARKHAND 55 MARKETING MIX OF COCA COLA 66 PRODUCT STRATEGY 67 PRICING STRATEGY 78 PRICING STRATEGY AND TACTICS 79 PROMOTION STRATEGY 810 PLACE 811 DISTRIBUTION STRATEGY 912 DISTRIBUTION STRUCTURE 1013 MARKETING CHANNELS 1214 TYPES OF INTERMEDIARIES 1215 TERRITORY ALLOCATION 1316 INDIVIDUAL SALESPERSON’S TARGET 1317 FLOW OF THE PRODUCT 1418 PERFORMANCE ASSESSMENT OF MARKETING CHANNELS 1519 PERSONAL SELLING OBJECTIVES 1520 SALES PLAN AND ORDER EXECUTION 1621 CHANNEL POLICIES AND LEGAL ISSUES 1622 DOCUMENTATIONS REQUIRED 1723 CONCLUSION 18

COMPANY PROFILE

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The Coca-Cola Company is the world's largest beverage company, refreshing consumers with more than 500 sparkling and still brands. Coca-Cola is a carbonated soft drink sold in stores, restaurants, and vending machines throughout the world.[1] It is produced by The Coca-Cola Company of Atlanta, Georgia, and is often referred to simply as Coke (a registered trademark of The Coca-Cola Company in the United States since March 27, 1944). Originally intended as a patent medicine when it was invented in the late 19th century by John Pemberton, Coca-Cola was bought out by a businessman Asa Griggs Candler, whose marketing tactics led Coke to its dominance of the world soft-drink market throughout the 20th century.

The company produces concentrate, which is then sold to licensed Coca-Cola bottlers throughout the world. The bottlers, who hold territorially exclusive contracts with the company, produce finished product in cans and bottles from the concentrate in combination with filtered water and sweeteners. The bottlers then sell, distribute and merchandise Coca-Cola to retail stores and vending machines. The Coca-Cola Company also sells concentrate for soda fountains to major restaurants and food service distributors. Coke products could be found in over 200 countries worldwide, with consumers downing more than 1.8 billion company beverage servings each day.

• Coke re-entered India in 1993

• Coke globally serves 500 brands in

200 countries @ 1.7 billion servings per day.

• Operates a franchised distribution system 1889

• Market Cap: $167.25 Billion (Global)

• Revenues: $46.542 Billion (Global)

• Employees = 25K direct & 150K indirect (India)

COCA COLA IN INDIA

• Coke India comprises of:

– Coca-Cola India

– Hindustan Coca-Cola Beverages Pvt. Ltd.

– Franchisee bottling operations

The Coca-Cola Company re-entered India through its wholly owned subsidiary, Coca-Cola India Private Limited and re-launched Coca-Cola in 1993 after the opening up of

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John Pemberton

The founder of Coca Cola

the Indian economy to foreign investments in 1991. Since then its operations have grown rapidly through a model that supports bottling operations, both company owned as well as locally owned and includes over 7,000 Indian distributors and more than 2.2 million retailers. Today, our brands are the leading brands in most beverage segments.

In India, the Coca-Cola system comprises of a wholly owned subsidiary of The Coca-Cola Company namely Coca-Cola India Pvt Ltd which manufactures and sells concentrate and beverage bases and powdered beverage mixes, a Company-owned bottling entity, namely, Hindustan Coca-Cola Beverages Pvt. Ltd. and thirteen licensed bottling partners of The Coca-Cola Company, who are authorized to prepare, package, sell and distribute beverages under certain specified trademarks of The Coca-Cola Company; and an extensive distribution system comprising of our customers, distributors and retailers. Coca-Cola India Private Limited sells concentrate and beverage bases to authorized bottlers who are authorized to use these to produce our portfolio of beverages. These authorized bottlers independently develop local markets and distribute beverages to grocers, small retailers, supermarkets, restaurants and numerous other businesses. In turn, these customers make our beverages available to consumers across India

(HCCBPL)Hindustan Coca Cola Beverages Pvt. Ltd

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HCCBPLHindustan Coca Cola Beverages Pvt. Ltd

(Sales and Distribution)

CCI Coca Cola India

(Advertisement and Promotion)

The Coca Cola Company

Sales Manager

Area Sales Manager

Sales Team Leader

Market Development Executive / Pre-sellers

Hindustan Coca-Cola Beverages Private Limited (HCCBPL) is the company-owned Bottling operation of The Coca-Cola Company in India. The Company is engaged in

production, manufacture, bottling, sale, distribution, and supply of non-alcoholic ready to drink beverages including sparkling beverages,

packaged drinking water, and fruit based drinks under various trademarks across designated territories pan India.

Jharkhand and Orissa come under a single zone under the HCCBPL with its bottling plant in Rourkela, Orissa from where the products are supplied across the two states via road transport.

Hierarchy of HCCBPL Jharkhand ( Sales )

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MARKETING MIX OF COCA COLA

Coca cola is the brand with the highest brand equity. No doubt it has gone through the ups and downs of business to reach that position. The marketing mix of Coca cola has been changing over time with more and more products being added such that today it has 3300 products. Following are the various strategies implemented by the company in the Ranchi district.

Product Strategy The core product is what the consumer is actually buying and the benefits it gives.

Coca Cola customers are buying a wide range of soft drinks. The actual product is the parts and features, which deliver the core product. Consumers will buy the coke product because of the high standards and high quality of the Coca Cola products.

The augmented product is the extra consumer benefits and services provided to customers. Since soft drinks are a consumable good, the augmented level is very limited. But Coca Cola do offer a help line and complaint phone service for customers who are not satisfied with the product or wish to give feedback on the products.

The different SKUs ( Stock Keeping Unit ) of the Coca Cola products available in the Ranchi market.

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Pricing Strategy Price is a very important part of the marketing mix as it can effect both the supply and

demand for Coca Cola. The price of Coca Cola’s products is one of the most important factors in a customer’s decision to buy. Price will often be the difference that will push a customer to buy our product over another, as long as most things are fairly similar. For this reason pricing policies need to be designed with consumers and external influences in mind, in order to effectively achieve a stable balance between sales and covering the production costs.

Price strategies are important to Coca Cola because the price determines the amount of sales and profit per unit sold. The company sets a price that is attractive to its customers and in return provides value to the price. Long before a sale was ever made Coca Cola had developed a forecast of consumer demand at different prices which inevitably determined whether or not the product came in the market, as well as the allocation of adequate money and resources to produce, promote and distribute the product.

Pricing Strategies And Tactics

In Ranchi, Coca Cola has used Penetration Pricing as a way of grabbing a foothold in the market and won a market share. It’s product penetrated the marketplace. Once customer loyalty is established as seen with Coca Cola it is then able to slowly raise the price of its product. There has been a fierce pricing rivalry between Coca Cola and Pepsi products in Ranchi as each company competes for customer recognition and satisfaction. Till now it appears as if Coke has reached the top, although in order to gain long term profits Coke had to sacrifice short term profits where in some cases it either went under of just broke even e.g. during the times of IPL in Ranchi, but as seen it has been all for the best. Pricing Methods Good pricing decisions are based on an analysis of what target customers expect to pay, and what they perceive as good quality. If the price is too high, consumers will spend their money on other goods and services. If the price is too low, the firm can lose money and go out of business. Pricing methods include:

Cost based Pricing Market based pricing Competition based Pricing

Product Life Cycle: The PLC of Coca Cola is an important factor for the pricing of the products because beverages are seasonal. Their demand arises mainly during the summers and declines towards the winters. The price of the products keeps fluctuating throughout the year. Coca-Cola is currently in the maturity stage as summer has set in Ranchi, which is a good sign for the company. The company sells its 60% products during the 3 months of summer in Ranchi.

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Promotion Strategy

The promotion strategies of Coca Cola in Ranchi are focused on:- Initiating strong awareness about the products , both new and existing.- Winning market share over existing competitors e.g. PepsiCo, Amul, Parle etc.

Coca Cola India is responsible for advertising and promotion of the products. The main form of advertising in Ranchi can be seen in the form of

Flex boards on the retail outlets Hoardings near the outlets Red paintings on the walls with the COKE logo and slogans

Coca cola adopts various advertising and promotional strategies to create an increased demand in the market by associating with life style and behaviour and mainly targeting value based advertising. It allows price discounts and allowances to distributors and retailers in order to push more products into the market. Advertising of Coca Cola is mainly done through common media such as

television radio billboards newspapers and magazines.

Although advertising is usually very expensive, it is the most effective way of reminding and exposing potential customers to Coca Cola Products. Coca Cola also utilizes below the line promotions such as

Contests Coupons Free samples Sponsorship

Place Coca cola is the world’s most favourite brand and is available all over the world. The distribution system of coca cola follows the FMCG distribution pattern. The effective distribution network of Coke has almost eroded the small and middle level players in the markets of Jharkhand and Orissa. In Ranchi, they have captured even the nearby rural market by extensive distribution. Coca Cola has elected to transport and sell its product. Selecting the most appropriate distribution channel is important, as the choice will determine sales levels and costs. The choice for a distribution channel for any business depends on numerous factors, these include:

• How far away the customers are;

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Coca-Cola India

Regional Bottlers

COBO/FOBO

Customers

Manufactures Concentrate,

Beverage base and Syrup

Manufactures finished

Bottles/Cans/Fountain Syrup

Consumers

• The type of product being transported;

• The lead times required; and;

• The costs associated with transport;

Distribution Strategy:

Coca Cola has developed its distribution network all over the world. It follows two types ofdistribution strategy:- Direct selling: In this method, Coca Cola supply various products to retailers. Theseretailers may be retail stores, restaurants, cinema halls etc. The company uses its ownvehicles to deliver the products. Direct selling brings in only small part of the revenue.

- Indirect selling: Most of the revenue comes from this channel. Coca Cola gets intopartnership with various distributor agencies. The company supply products to thesedistributors, who then make them available to the retailers.

Manufactures & distributes :

Concentrates

Syrups

Bottlers make the final beverage through :

COBO (Company owned bottling operations)

FOBO (Franchise owned bottling operations)

Each bottler has an exclusive territory ( Ranchi is supplied by the Rourkela Bottling Plant )

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Distribution Routes :

The products are first dispatched from the Rourkela Bottling Plant to the Mother Depot in Namkum based on the order.

Then the products are supplied to the C & F at Ogygen Campus, Kokar and various distributors across the city.

The Salespersons are responsible for collecting orders from their PJPs ( Permanent Journey Plan ) and dispatching the products the very next day.

The distributors have their own transportation system for supplying the products to the retailers.

Distribution Structure

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PlantWarehouseDirect Route

Market

Indirect RouteDistributor

Market

DIRECT INDIRECT

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DIRECT: On Order & Ready Stock

INDIRECT: Distributors cover 500-600 outlets

MARKETING CHANNELS

The company operates three main primary delivery systems for its business channels:

Bulk delivery Advanced sale for smaller channels Full service delivery for its full service vending customers

The Ranchi market has been segregated into 4 major channels:

TYPES OF INTERMEDIARIES

The main intermediaries in Ranchi comprise a C&F at Ogygen Campus, Kokar and several distributors across the city.

Chama Enterprises ( C&F ) Oxygen Campus, Kokar Prabha Enterprises, Harmu Chowk Star Distributors, Hindpidi Keshav Madhav Enterprises, Dhurwa Sector 2 Gayatri Biz Enterprises, Hatia Mahabir Enterprises, Upper Bazar

These intermediaries are responsible for supplying the products to the local retailers in their respective areas as per the orders received. For effective distribution they are required to maintain a good transport system comprising Tempo or Mini Trucks.

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CONVENIENCE

General stores dealing in daily consumption products

EAT & DRINK 1

Eating joints which do not have a seating arrangement.

EAT & DRINK 2

Eating joints which have seating arrangements. All restaurants and hotels come under this category.

GROCERY

All grocery stores. They come under the HAPPY DEAL STORE plan.

TERRITORY ALLOCATION OF INTERMEDIARIES AND SALESPERSONS

The Ranchi market has been distributed into several routes and are referred to as PJP ( Permanent Journey Plan ).

Purulia Road - Lalpur - Kokar Kanta Toli - Bus Stand Bahu Bazar - Chutia HB Road - Circular Road Main Road – Upper Bazar Ratu Road - Kanke Morabadi - Bariatu Kadru - Ashok Nagar Doranda - Hinoo Hatia - Dhurwa Namkum – Tatisilve Ratu Road - Pandra

The above routes are the journey plans allocated to ONE salesperson ( Market Developer ) and comes under the distributor which is in that respective zone.

For example : Kadru – Ashoknagar comes under Prabha Enterprises

Doranda – Hinoo comes under Keshav Madhav Enterprises.

INDIVIDUAL SALES PERSON’S TARGET

Every salesperson has to travel his / her permanent journey plan on the allocated days.

The target for each sales person is fixed in the gate meeting which is held at 9am at the C&F at Kokar.

E.g. 1 sales person : 20 crates of COKE + 15 crates of THUMS UP + 10 crates of WATER + 5 crates of 2litre crates of any SKU.

Apart from this, there is also a TELL-SALE situated at the bottling plant from where orders are taken via telephone. Many a times it helps the salesperson to achieve his target via Tell-Sale.

If any sales person fails to achieve his / her target , then the remaining target get carried over. Also there is a deduction in his/her incentives.

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Pre-seller goes on his route and books the orders

9am- 6pm

On a tablet or

Blackberry

First vehicles leaves at 6amAll vehicles leave by 9.30am

6am-9.30am

Cannot take more than order

Only cash except for

a few

Flow of the Product

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PERFORMANCE ASSESSMENT OF MARKETING CHANNELS

The performance of the marketing channels is mandatory for a company like Coca Cola because it invests a huge amount of money for its promotion and sale purpose with respect to its marketing channels.

The channels are provided with COOLERS for selling the products which are expensive assets of the company. The company expects a feasible return on its investment.

The performance measure used by the coca Cola company is known as GREEN ( Grow by Excellence Execution )

Focus on cooler billing with brand COKE as well as range selling continues From 2014 two parameters have been introduced to better align GREEN to strategic

imperatives. New parameter #1 : Cooler productivity : the retailers should be able to drive

ample amount of products with respect to their coolersEg. A retailer having a 9 visibility cooler should be able to sell at least 36 crates of Coke in a month. Similarly a retailer with 20 visibility cooler should be able to sell 60 crates of Coke in a month.

New parameter #2 : Tell-sell coverage : A retailer has to order a minimum of 3 crates of products in their respective PJPs.

Assessment of retailers and distributors is done on a monthly basis along with their respective salesperson.

PERSONAL SELLING OBJECTIVES

The company is focused on achieving its personal selling objectives with regards to its products.

The most important objective of the company is the sale of its mother product COKE.

The irony is that other products like THUMS UP and SPRITE have cannibalized the sale of the mother product so the company tries to push COKE for sale. Even the rate at which COKE is sold is cheaper than the other products.

The advertisements are also focused on COKE which states “ Open Happiness”.

Through its regular assessments the company makes sure that the retailers keep a specified quantity of COKE in their outlets because the mother product forms the basis of their assessments as well.

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SALES PLAN AND ORDER EXECUTION

a) Sales force discipline

Scheduled call completion [PJP ( permanent journey plan)/PCP( permanent call plan) Compliance

<5% Unscheduled orders

b) Sales force effectiveness

PJP call productivity All cooler outlets billed with brand COKE Average no. of SKUs per invoice All outlet billing

c) Driving returns

Cooler productivity Tell-sell coverage

d) Scheduled call completion

The % of outlets visited by the Pre-seller/Tell seller as per his PJP/PCP. Low/non-compliance would lead to outlets not getting visited or getting the right

service frequency, thus leading to sales loss. Hence the importance of scientific PJP design and of PJP review every 1-2 months GREEN 2014 will calculate PJP compliance score as per actual achievement.

CHANNEL POLICIES AND LEGAL ISSUES

For Retailers and Distributors

The Coca Cola company makes its stakeholders undergo legal procedures in order to

be a part of the company.

A distributor has to have a LEGAL CONTRACT signed with the company before

becoming a distributor. The company demands that a distributor should have a

minimum of 600 sq feet of space for the storage of goods with proper safety

installations.

A distributor needs to have a minimum of THREE vehicles with licensed drivers for

the supply of products.

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According to company norms a retailer needs to purchase a minimum of 6 crates

( Rs.200 per crate ) in order to sell Coca Cola products. Any damage to the bottles

will not be the company’s responsibility.

As per the contract, it is in the power of the company to stop any kind of transaction

with a retailer or distributor if any clause of the contarct is breached.

The coolers provided to the retailers are solely for sale purpose. Any retailer found

violating this rule will be penalized.

The Coca-Cola Company's suppliers shall comply with the following requirements:

Prohibition on Cartel Activity

Supplier Code of Business Conduct

Supplier Guiding Principles

Trade Sanctions Policy

DOCUMENTATIONS REQUIRED

The company transports its products from the bottling plant in Rourkela, Orissa to the mother depot at Namkum. Several documents are mandatory for the smooth distribution of the products. The transportation is done via Road in lorries.

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PRODUCTION

Rourkela Bottling Plant

DISPATCH PLAN

MARKETING DEPARTMENT

DELIVERY ORDER

List of products ( SKU ) Road permit Mode of dispatch

DOCUMENTS REQUIRED:

INVOICE/ CHALLAN containing the list of products ordered ( the total number of SKUs being transported )

LORRY RECEIPT describing the transportation of goods with a consignee copy given at the mother depot.

ROAD PERMIT for transporting goods from Rourkela to Ranchi.

EXCISE GATEPASS consisting of product, packing, quantity, MRP, rate of duty, duty amount, time of clearance, lorry particulars, range address, division address etc.

CONCLUSION

The study helped us to get a first hand experience of the Coca Cola company’s various

marketing strategies in order to remain the beverage giant in the Ranchi market. The in-depth

knowledge that we got by doing this project helped us to understand Marketing in Practice in

a more comprehensible way.

The project clearly outlines the strategies implemented by the Coca Cola company in the

Ranchi market with repect to product, place, price, promotion and distribution and justifies

the saying “ jo dikhta hai wo bikta hai”

The Coca Cola company regularly implements and improvises its marketing strategies to

maintain its position as the beverage giant.

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