EXECUTIVE SUMMARY

The research study was conducted to learn the localization strategy of the global beverage company Coca-Cola in terms of two of its marketing mix variables, namely, the product line and the distribution process. In the process detailed information was collected on products launched, sales and distribution practices followed by the company, the working style of the retail outlets that stocked and retailed Coca-Cola products, and to a limited extent the psyche of the consumers. In addition the study also uncovered initiatives taken up by the top level management and the strategies they laid out to enhance the company’s market share and sales turnover.

INTRODUCTION

Definition of product line: A product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same type of outlets, or fall within given price ranges. The major product line decision involves product line length- the number of items in the product line. Product line length is influenced by company objectives and resources.

Introduction of the company:

“Atlanta Beginnings 1886-1892”

It was 1886, and in New York Harbor, workers were constructing the Statue of Liberty. Eight hundred miles away another great American symbol was about to be unveiled.

Like many people who change history, John Pemberton, a Civil War veteran and Atlanta pharmacist, was inspired by simple curiosity. He loved tinkering with medicinal formulas, and one afternoon, searching for a quick cure for headaches, he stirred up a fragrant, caramel-colored liquid in a three-legged pot. When it was done, he carried it a few doors down to Jacobs’ Pharmacy.

Here, the mixture was combined with carbonated water and sampled by customers who all agreed – this new drink was something special. So Jacobs’ Pharmacy put it on sale for five cents a glass. Pemberton's bookkeeper Frank Robinson named the mixture Coca-Cola , and wrote it out in his distinct script. To this day, Coca-Cola is written the same way.

In its first year, the Company sold about 9 glasses of Coca-Cola a day. A century later, The Coca-Cola Company has produced over 10 billion gallons of syrup. Unfortunately for Pemberton, he was more of an inventor than a businessman, and had no idea that he had invented one of the greatest products in the world. Over the course of three years, 1888-1891, Pemberton sold the Company to Atlanta businessman Asa Griggs Candler for a total of about $2300. Candler would become the Company's first president, and the first to bring real vision to the business and the brand.

“Beyond Atlanta 1893-1904”

Asa Candler, a natural born salesman, transformed Coca-Cola from an invention into a business. He knew there were thirsty people out there, and Candler found brilliant and innovative ways to introduce them to this exciting new refreshment. He gave away coupons for complimentary first tastes of Coca-Cola, and outfitted distributing pharmacists with clocks, urns, calendars and apothecary scales bearing the Coca-Cola brand. People saw Coca-Cola everywhere, and the aggressive promotion worked. By 1895, Candler had built syrup plants in Chicago, Dallas and Los Angeles.

Inevitably, the soda’s popularity led to a demand for it to be enjoyed in new ways. In 1894, a Mississippi businessman named Joseph Biedenharn became the first to put the drink in bottles. He sent 12 of them to Candler, who responded without enthusiasm. Despite being a brilliant and innovative businessman, he didn’t realize then that the heart of Coca-Cola would be with portable, bottled beverages customers could take anywhere. He still didn’t realize it five years later, when, in 1899, two Chattanooga lawyers, Benjamin F. Thomas and Joseph B. Whitehead, secured exclusive rights from him to bottle and sell the beverage – for the sum of one dollar.

“A World of Customers 1960-1981”

After 75 years of amazing success with brand Coca-Cola, the Company decided to expand with new flavors: Sprite , in 1961, TAB in 1963 and Fresca in 1966.

The Company’s presence worldwide was growing rapidly, and year after year, Coca-Cola found a home in more and more places: Cambodia, Montserrat, Paraguay, Macau, Turkey and more. Advertising for Coca-Cola, always an important and exciting part of its business, really came into its own in the ‘70s, and reflects a brand totally in tune with fun, playfulness and freedom. The international appeal of Coca-Cola was embodied by a 1971 commercial, where a group of young people from all over the world gathered on a hilltop in Italy to sing “I’d Like to Buy the World a Coke.” In 1978, The Coca-Cola Company was selected as the only company allowed to sell packaged cold drinks in the People’s Republic of China.

“Diet Coke and New Coke 1982-1989”

The ‘80s – the era of legwarmers, headbands and the fitness craze, and a time of much change and innovation at The Coca-Cola Company. In 1981, RobertoC. Goizueta became chairman of The Board of Directors and CEO of The Coca-Cola Company. Goizueta, who fled Castro’s Cuba in 1961, completely overhauled the Company with a strategy he called “intelligent risk taking.” Among his bold moves was organizing the numerous U.S. bottling operations into a new public

company, Coca-Cola Enterprises, Inc. He also released diet Coke®, the very first extension of the Coca-Cola trademark --within two years, it had become the top low-calorie drink in the world, second in success only to Coca-Cola.

One of Goizueta’s other initiatives, in 1985, was the release of a new taste for Coca-Cola, the first change in formulation in 99 years.

Coca–Cola brought thrilling refreshment to patrons of a small Atlanta pharmacy. Now well into its second century, the Company’s goal is to provide that magic everytime, in 200 countries, with each of its 230+ and ever-growing brands. In the remotest corners of the globe, you can still find Coca-Cola.

In February 2000, Doug Daft was named Company Chairman. Coca-Cola is a huge international company, Daft’s vision is to have the company operate as a collection of smaller , locally run businesses. That’s why Coca-Cola is committed to local markets, to paying attention to what people from different cultures and backgrounds like to drink, and where and how they want to drink it. Every 10 seconds, 126,000 people choose to reach for one of the Coac-Cola branand it’s the company’s mission to make that choice exciting and satisfying, every single time.

Coca-Cola India:

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 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, these brands are the leading brands in most beverage segments. The Coca-Cola Company's brands in India include Coca-Cola, Fanta Orange, Limca, Sprite, Thums Up, Burn, Kinley, Maaza, Minute Maid Pulpy Orange, Minute Maid Nimbu Fresh and the Georgia Gold range of teas and coffees and Vitingo (a beverage fortified with micro-nutrients).

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; 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 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 the beverages available to consumers across India.

The Company’s products are an integral part of the micro economy particularly in small towns and villages, contributing to creation of jobs and growth in GDP. Coca-Cola in India is amongst the largest domestic buyers of certain agricultural products.

As an industry which has strong backward and forward linkages, their operations catalysis growth in demand for products like glass, plastic, refrigeration, transportation, and Industrial and agricultural products. These operations also lead to incremental growth for enterprises engaged in post-production activities like merchandising, marketing and sales. In addition, the company shares best practices and technological advancements with their suppliers, vendors and allied industries which often lead to improvement in the overall standards of quality across industries.

The Coca-Cola Company has always placed high value on good citizenship. Their basic proposition entails that the Company's business should refresh the market; enrich the workplace; protect and preserve the environment; and strengthen the community. They leverage their unique strengths to actively support and respond to local needs -- be it the need for education, health, water or nutrition. They have used their distribution network for disaster relief, their marketing prowess to raise awareness on issues such as PET recycling, and their presence in communities to improve access to education and potable water. The Coca-Cola India Foundation is now taking forward in the community at large, projects and programs of social relevance to carry forward the message of inclusive growth and development.

NATURE OF THE PROBLEM:

It is indeed not an easy task for a marketer to get his value proposition right the first time around when he enters an international market and targets a new set of customers. Coca Cola too faced this test when it entered India. The two most difficult marketing mix variables to manage were the product line and distribution. Appealing to Indian palates meant modifying existing products and adding and subtracting form existing portfolio. Taking the product to the consumers and achieving ‘last mile connectivity’ through channel partner networks also wasn’t easy.

This assignment is intended to plug the gap in the understanding of how a beverage major navigated the Indian markets successfully with a product portfolio and a built-up distribution muscle. The paper is focused in mapping how Coca Cola executes its daily distribution scheme and also the mistakes it made with its product portfolio were rectified after hitting the Indian market.

LITERATURE REVIEW

There are research studies that document the transition of multinational companies into transnational companies that are highly responsive to stake holders concerns. In the past most of the multinational companies were focussed on trying to penetrate global markets with standardized products by calling it a ‘global offer’. In addition they also tried to reap the benefits of economies of scale and experience curve effects. Theodore Levitt (1984) proposed to multinational companies that they continue offering standardized products with the help of marketing strategies and not to design and sell customized or localised products.

C.K Prahalad and Kenneth Lieberthal (2003) in their article “The end of corporate imperialism” have felt that western multinational companies could have done better by understanding the distinctive environment of emerging countries like India and China. They argued that these firms have been imposing concepts, products, ideas developed for their home country in foreign markets.

They charged that these multinational firms could have targeted a smaller segment of relatively affluent customers who are at par with western consumers in terms of purchasing power and lifestyle. Researchers have also explored the various benefits of localization that accrue to a localized brand such as larger brand equity, customer satisfaction, and customer and employee commitment to the product or brand, or to the company. It’s been opined that localization strategies are very much required for value creation/addition, and hence it is termed as“value-based localization” instead of “cost-based localization” (Lalit M. Johri and Phallapa Petison, 2007).

One of best theories on such localisation lines has been the integration responsiveness framework proposed by C.K Prahalad & Doz (1987) which has given great insight & recommendations for the MNC’s in managing integration pressure from home country & local responsiveness pressure from host country.

HINDUSTAN COCA COLA’S ADAPTATION STRATEGIES:

For Coca-Cola company Indian market has been promising and overwhelming. India has become an important part of their growth story by contributing 13% of total volume of the Eurasia and Africa Group. The performance of Indian

subsidiary has shown consistent growth since past 19 quarters and there was 9% growth of unit case volume during January-March of this year. At present India is among top 10 growth markets and chairman and CEO of The Coca-Cola Company Muhtar Kent is confident of India entering its top 5 markets in a span of five years.

MARKETING MIX:

The Marketing mix of any company presented as value proposition to consumers plays an important role in its performance. The mix needs to be strategic, dynamic, and sensitive to the changed taste and preferences of consumers. This in turn is in response to demographical, geographical, and psychological factors, as well as government regulations and other global market forces. In the global marketplace that sees severe competition, it is very important for the companies to offer great variety (portfolio) of products with high quality, and which are produced cost effectively. In the process global firms should be able to improve the relationship they build with all the stake holders, resulting in sustainable growth with better financial performance and enhanced brand equity.

PRODUCT LINE:

Coca-Cola India offers a comprehensive range of beverages. They include Coca-Cola, Diet Coke, Thums Up, Fanta, Limca, Sprite, Maaza, Maaza Milky Delite, Minute Maid Pulpy Orange, Minute Maid Nimbu Fresh, Minute Maid Mixed Fruit, Minute Maid Apple, Georgia,Georgia Gold, Kinley, Kinley Club Soda and Burn.Some of the recent product launches that have added to the company’s product portfolio have been launch of Fanta Fun Times, and Nimbu Fresh. In addition in course of exploring new horizons, product range widening and brand extension in India, Coca-Cola has re-entered the Rs 300 crore branded powdered ready-to-drink market. As a part of the company’s penetration strategy and understanding the affordability of middle class consumers, Coca-Cola has chosen the Rs. 5 price point aiming at mass consumers. The objective is to eat into the market share of the category leader Rasna. Rasna claims to hold 93% market share in the Indian powdered soft drink market. Before the launch, Coca Cola intends to conduct market testing of the product before getting into pan-India launch. The fact is,

India is the only market where the company is entering into the concentrate category under the brand Fanta. Also it is the only fifth market where a powdered offering of any of its brands is being made available. Coca-Cola has powdered beverage brands like Eight O' Clock juice and juice drink in Philippines, the Sunfill brand in Hong Kong, Kenya and the US. Through such launches Coca-Cola India intends to target the consumer segment at the bottom of the socio-economic pyramid and accordingly the above mentioned price point of Rs 5 is fixed. In line with these factors the retailers selected for the new product are traditional FMCG outlets/kirana stores without refrigeration facility.

NEW PULP-BASED PRODUCTS UNDER THE BRAND NAME OF MINUTE MAID:

Taking advantage of 2011 summer season, the global beverage giant is making preparations in advance to compete in the pure juices market dominated by its competitors PepsiCo with its brand Tropicana, and Dabur with its Real brand. The company intends to enter the market by coming up with market offerings which include three variants of Minute Maid juices namely, orange, apple and grape. The current fruit-based juice brands, the mango juice-based drink Maaza and Minute Maid are not pure juices. This is also a part of Hindustan Coca -Cola’s strategy to widen its healthy drinks portfolio, due to increasing number of health conscious customers. This pulp-based segment is growing annually at 20% in India and has in the past given promising results for the existing players. Also this launch in addition to recently launched Minute Maid Nimbu Fresh and Pulpy Orange is intended to ensure strong presence and competitive advantage in the high potential health segment.

Re-entry Strategy:

During the re-entry of Coca-Cola in 1993, it had acquired soft drink brands like Thums up, Goldspot, Limca, Maaza, Bisleri soda from its creator Parle. This was intended to get existing strong customer base & brand image in the Indian market.

Price Points:

The company’s consumer pricing strategy uses competitors pricing as base in addition to considering the targeted consumer segments and quantity per unit. The company has a different pricing strategy for different channel partners. The company offers credit facility to very few institutional customers. The above mentioned product launch examples gives some insight about the product specific pricing strategies.

Retail & Distribution:

The Coca-Cola Company in India is governed from its corporate office located at Ghaziabad. This office manages the working of five zones covering whole of India.

The different and segregated zones are:

1. Northern zone,

2. Eastern zone,

3. Western zone,

4. Southern zone &

5. Andhra Pradesh zone.

These zones are divided into various plants and offices which govern the area assigned to them. The areas are the various distribution centres consisting of Distributors and Carry & Forward agents. Further down the distribution chain comes, the retailers/customer for the company's product. They receive goods from distributors and C&F agents. Finally consumer is the buyer accessing the product from the retail shops or having them delivered to their homes. The Coca-Cola Company typically has its reach taking its products to billions of people all around the world using wide distribution networks. In India, the pace and speed at which Coca-Cola has widened its business is truly amazing. Distribution network remains the biggest strength of the company.

TRADE PROMOTION:

As a part of ‘pull strategy’ and also due to intense competition, Coca Cola spends billions of rupees on advertisements. This part of marketing communication plays a very crucial and vital role in the current situation in India. Looking at the competition and promotion and advertising budget of both the companies Coca cola and Pepsi, one can easily estimate the importance of marketing communication via mass media.

The promotion mix of Coca-Cola is divided into top line promotion and below the line promotion -Top line promotions includes, the promotional activities intended towards mass consumers using mass media. These are designed and executed by the company's corporate office atGurgaon and their office at Mumbai. TV Ads, design of banners, and other mega event (likeworld cup cricket match and other) sponsorship initiatives taken up by the company simultaneously all around India with no difference in designs or execution fall in this category.

Below the line promotion includes the promotion schemes, publicity material, Point of Sale display done by the company from zonal, plant, sales manager and area sales manager level. At the sales manager and area sales manager level promotion is done exclusively for the cities in their respective areas. These activities can be categorized under sales promotions. In order to add local flavor in its advertisements and promotional activities, Coca Cola has collaborated with established Stars and Programmers (Stars include Daler Mehndi). Coca-Cola also connected with movies such as ‘Taal’ and ‘Dil Ka Rishta’. The company has understood the importance of festivals in the Indian Culture and has taken lot of initiatives in this regard. Coca-Cola has an enduring affiliation with cricket which is the most beloved game for Indians. “Thanda Matlab Coca-Cola” is one of the most remembered tag line in its advertisements. Hindi being the national language and the most spoken language in the country, most of the company’s advertisements are broadcasted in Hindi language.

DISTRIBUTION SYSTEM IN INDIA:

The routes formulated by HCCBPL (Hindustan Coca Cola Beverages Pvt. Ltd. (India) for distribution of products are as follows: Key Accounts: These key institutional customers contribute a large piece of the total sales of the Company. It mainly consists of organizations that buy large quantities of a product in one single transaction. Because of their volumes and bargaining power the Company offers one month or 15 days credit. They include Defence canteens, Clubs, fine dine restaurants, hotels, Corporate houses etc.

Future Consumption: The segment consists of outlets of Coca-Cola products holding decent amount of stock meant for future consumption. This is done to ensure the product is available all time. They include Food courts, Departmental stores, Super markets etc.

Immediate Consumption: Stocks need to be replenished on daily basis for immediate consumption form retail stores. The stocks of products in these outlets are sold on the same day and very few bottles may be left for next day such outlets include retailers, canteens of educational institutions, small sized bars and restaurants, and unorganized retailers.

General: In this route a few but specific areas are grouped and served in one go. These include remote areas, rural places, and hill stations with less density of populations.

Distribution Modes:

Direct distribution: In this mode, the bottling unit or the bottler partner manages sales,delivery, and merchandising and local account management at the store level.

Indirect distribution: In this mode of distribution, an organization which is not part of the structured network manages the sale of products. The Coca-Cola distribution system manages one or more of the distribution functions (Sales, delivery, merchandising and local account management)

METHODOLOGY

My methodology was only secondary material. This study was conducted using descriptive research using the survey method of collecting sales data of the company and websites.

“Coca-Cola set to take plunge in juice pool”

Samidha Sharma, TNN Mar 24, 2011, 01.07am IST

MUMBAI: Coca-Cola India is readying itself for a big summer push as it enters the pure juices market dominated by arch-rival PepsiCo's Tropicana and Dabur's Real. The world's biggest beverage maker will take a plunge into the high-growth juice market with three variants of Minute Maid juices-orange, apple and grape. It currently sells two juice brands-the mango juice-based drink Maaza and Minute Maid, which are all fruit-based but not pure juices.

Coca-Cola India has recently formed a separate division for juices to focus on its non-carbonated portfolio as all major food and beverage companies increasingly fortify their health portfolio in a market which is annually growing at 20%. Health products and juices have been at the top of these companies' bucket list since they have launched new products and categories to capture a share of the pie. With an increased focus on the juice category, Coca-Cola India recently appointed Andriy Avramenko as its general manager of the juice business. Avramenko, who came from Coke's global juice centre (GJC) in Atlanta, heads a team that is focused exclusively on advancing the company's pulp-based beverages.

Confirming the launch, Atul Singh, president & CEO, Coca-Cola India and South West Asia, told TOI that the company sees an enormous opportunity in the packaged beverage market and, therefore, the launch is aimed at establishing the company's juice footprint after introducing Minute Maid Nimbu Fresh and Pulpy Orange.

Coca-Cola India is partnering with Future Group's Big Bazaar wherein the country's largest retailer will stock the product exclusively for a day before it hits the shelves of other retail outlets. Priced at Rs 85 for a litre and Rs 20 for a 200 ml pack, the company is looking to first target modern retailers considering the premium attached to the 100% juice category.

Recently, the country's largest consumer goods company, Hindustan Unilever (HUL), launched its first fruit-based drink under the Kissan brand to strengthen its foods portfolio. Estimated to be around Rs 700 crore, the juice market is divided into two categories-100% (pure) and sweetened. While Dabur's Real is the biggest player in the juices market with about half of the market share, PepsiCo's Tropicana brand enjoys about 35% of this market. Other players include Parle Agro's Saint which has about 6-8% besides a slew of regional players. Both PepsiCo and Coca-Cola have been investing heavily in their non-carbonated portfolio with the increasing demand of

health-based drinks in India. To make a dent in this highly competitive market, Coca-Cola India, which is a late entrant into this category, has got Leo Burnett on board to handle its creative push.

The cola major has been expanding its non-carbonated beverage portfolio with launches like Maaza Milky Delite, its entry into the dairy segment, the ice tea brand Nestea with its joint venture partner Nestle, besides the fruit-based drinks Minute Maid Pulpy Orange and Minute Maid Nimbu Fresh.

“Coca-Cola to take up aggressive campaign for 'Fanta'”

PTI Feb 13, 2008, 06.45pm IST

NEW DELHI: Beverages major Coca-Cola is planning to kick start an aggressive advertising campaign to promote its flavoured soft drink 'Fanta' through a series of new commercials during the coming summer season. Sources said the company would soon start an integrated communication initiative focusing on out-of-home media to promote the beverage during summer. The new communication programme, centred around a brand new slogan, "Fanta ka New Orangy Blast - Laga Kya", would leverage a range of delivery channels including out-of-home media, digital platforms and mass media advertising, aimed at building stronger connection with the youth. "The new advertising strategy for Fanta would try to connect to the youth of the nation and would feature a new logo," sources said. Besides a mix of TV commercials of different durations, Coca-Cola would also use animated characters to promote the drink, in its yet to be launched integrated marketing campaign.The company would leverage outdoors like movie theatres, university campuses and other hang out zones.The campaign would also include a new TV commercial, conceptualised by Titus Upputuru, Senior Creative Director of Ogilvy & Mather, sources added. Orange flavoured beverages account for nearly one-sixth of the total Rs 6,000 crore Indian aerated drink market at Rs 1,000 crore per annum. Coca-Cola has captured 50 per cent share of this Rs 1,000 crore market with Fanta. Other beverages brands in Coca-Cola's kitty are Coca- Cola, Diet Coke, Thums Up, Fanta, Limca, Sprite, Maaza, Minute Maid Pulpy Orange, Georgia, Georgia Gold, Kinley and Kinley Club Soda.

“Faced with slowdown threat, Coca-Cola & Pepsico experiment with strategies to push volumes growth”

Ratna Bhushan, ET Bureau Jul 28, 2013, 12.02PM IST

You know you have a problem if your sales trail even developing markets. You know you have a serious problem if your growth in volumes is barely 1% from a year ago.That's the case with Coca-Cola India whose growth in the critical April-June quarter came crashing down from 20% a year ago. It was the worst performance of the Indian unit of the world's largest beverage maker in five years. Arch rival PepsiCo has fared better than Coke but not better than its own performance in the previous year's corresponding period. Its volumes grew 11% in March-May but it compares badly with the strong double-digit growth of a year ago. And to think that the numbers for the most crucial month of the year — June — aren't yet out.

A top official closely involved with PepsiCo operations said the company's growth in June has been soft as well, which may spoil the growth numbers for the next quarter.

New Game Plan

The India units of Coca-Cola and PepsiCo are critical bastions of growth for their American parents, but are now confronted with the threat of a slowdown in volumes. Executives of both companies have been forced to recast their strategy through a combination of price cuts, differential pricing (exactly the same product being sold at different prices in different cities), trade discounts, restructuring of distribution networks and stepping up capacities at bottling plants.

Starting this month, all Coca-Cola's beverages in 200 ml bottles will be sold at a flat Rs 10, down from Rs 11-12, a top trade official told ET Magazine. "It's heavy discounting and at the cost of profitability. The company is pushing volumes almost as if in panic," he says. Coca-Cola will support the move with aggressive advertising. It is not hard to see why. Early and prolonged rains have softened demand. Add to that inflation and the cola story in the recent past has gone haywire, putting pressure on executives to deliver and fast.

A veteran bottler said this quarter, which contributes 40% of the industry's annual sales, sets growth momentum for the rest of the year. "The industry hasn't seen such a bad June in years — this is the biggest month for the Rs 14,000crore aerated drinks industry," he says.Gautham Mukkavilli, CEO at PepsiCo India (beverages), says a distribution step-up, especially for its newer products ” Pepsi Atom, Tropicana Coconut blends and Nimbooz Masala Soda ” is a key focus area. "We have had strong volume growth in March-May on the back of our IPL activation. While the early monsoon has resulted in softening of demand, we remain focused on developing the category by concentrating on increasing distribution of our products," he says.PepsiCo is also experimenting with different pack sizes in general grocery stores and consumer promotions (price-offs or bundling of products at discounts) in modern trade to drive

consumption. "There's an urgency to drive volumes... Both firms are pushing different prices in different markets," said a trade insider.

Though the big impact came from rains, Atul Singh, deputy president at Coca-Cola's Pacific group, said in an interview last week that the slowing consumer sentiment is as much a concern for his company."I can't control the GDP. But I can control the availability of products, equipment, training people, retailers," he said.

For the summer, Coca-Cola has been banking on pushing sales by selling at a discount to large retailers and slashing prices of brand Coke in 200-ml bottles to Rs 8. The company will also sell in different sizes. Currently, Coca-Cola is testing tetrapacks of 100 ml for juices at entry-level prices of Rs 6.But are the rains only to blame? There is no better time than now to ask if the slump is due to consumers turning away from fizzy drinks to healthier options like iced tea and juices. Says leading brand consultant Harish Bijoor: "In many markets, fizzy drinks with sugar have hit a glass ceiling... India seems to be getting there fast." Bijoor points out that, for one, most schools have stopped stocking aerated drinks in their, as health awareness spreads. "Hydration choices aren't only about aerated drinks any more. Tea parlours, cafes selling smoothies and iced teas, frozen yogurt chains that offer consumers cooling choices on-the-move are options consumers have now," he adds. "Colas are also competing with packaged water which is how it is in the developed markets."Even so, there is no denying that rains have hurt. What is worse, there is the possibility of an extended monsoon. The meteorological department has predicted that rains are likely to last until September. India has already received its heaviest rainfall in 12 years in June.The cola majors are hoping the rains will recede soon. "We expect that the early monsoon will have a positive impact on rural demand. The upcoming festival season and increased rural demand will continue to drive consumer purchase," says Mukkavilli.Coca-Cola's Singh too is banking on the next two quarters, which include the festive season, to ride out of the slump.

“Coca-Cola India rejigs ops to push growth”

Samidha Sharma & Namrata Singh, TNN Sep 21, 2011, 12.28am IST

MUMBAI: In a bid to accelerate growth in key categories, Coca-Cola India has introduced changes to its management structure. While on the one hand, the world's largest non-alcoholic drinks maker has created a new vertical to push growth in rural markets by catering to the bottom of the pyramid (BOP) consumers, on the other it has introduced a division to focus on shopper marketing, which will draw sharper insights from purchasing patterns of consumers.While the BOP verticalm, called Emerging Markets & Franchise Leadership, will be fronted by Sanjeev Gupta, the customer & commercial vertical, for tracking shopper insights will be led by Sumanto

Datta. The cola major had in March this year brought in Andriy Avramenko to spearhead the newly created juice division, which recently launched 100% juice under the Minute Maid brand. All these verticals directly report to Atul Singh, president of the India and South West Asia, Coca-Cola. Creating new positions of senior leaders is one way in which the company is capitalizing on the growth opportunities. The other tool which the company is using to grow its business is innovation. The position of vice president, strategy & innovation has just been strengthened with a larger focus on innovation. Debabrata Mukherjee spearheads this role for India & South West Asia. "We will innovate and launch new products aimed at the bottom of the pyramid segment, devise suitable product distribution and retailing opportunities in conjunction with the bottlers and market the products to this category," Atul Singh, told TOI in an interview.Two products from the Coca-Cola stable which have been launched catering to this segment are Vitingo, a beverage powder enriched with vitamins, and Fanta Fun taste powder at the Rs 5 price point which was piloted in April this year.Interestingly, rival cola major, PepsiCo India has also launched a glucose based beverage, Gluco have a shelf life and electricity is a huge issue here. If I don't get a certain through-put, it doesn't make sense. We would like it to happen quickly, but it will take time. It is certainly an opportunity," said Singh. As per industry estimates, Coca-Cola India draws under 20% of its sales from the rural markets.Plus and Lehar Iron Chusti, a fortified iron snack in order to make inroads into the huge, yet unexplored, consumer base in rural India. These products are priced in the range of Rs 2-5."In rural markets, we have just begun our penetration. There are certain states in which we are fully penetrated, such as Punjab. If you look at how shampoo sachets are sold in rural markets it is a one way journey. But, I have to go and pick up the empty bottles, which makes it a two way journey. To keep a product in rural markets, it has to have a shelf life and electricity is a huge issue here. If I don't get a certain through-put, it doesn't make sense. We would like it to happen quickly, but it will take time. It is certainly an opportunity," said Singh. As per industry estimates, Coca-Cola India draws under 20% of its sales from the rural markets.

ANALYSIS

Inputs collected from the market and sales force confirms that a large majority of the retail outlets serviced by Coca-Cola India stock up almost all the Brands of Coca-Cola like Thums up, Sprite, Maaza, Minute Maid- Orange & Lime etc. This also reveals that the distribution process followed by Coca-Cola is strong in most of the regions. The data collected substantiates that Coca Cola is the most fast moving brand in their product portfolio. The study gives some facts about the sales figures. On an average, Coca-Cola sells over 40 cases (all Brands) of stock per week. This proves that Coca-Cola has consistent sales every month & is able to supply as per the requirement of channel partners. In the data about replenishment, it was seen that majority of the outlet’s replenishment cycle is over 60%; this clearly states that the outlets order twice a week in their course of business. This also illustrates that the sale of Coca-Cola is very good over regions. The information collected again proves that majority of the outlets on a weekly twice basis buy over 3 cases of each brand of Coca-Cola. This is due to the increasing response of the consumers who buy Coca-Cola & which in turn increases the sales of the company.

This also presents a clearpicture that the distribution of Coca-Cola has a strong network & can deliver stock the very next day the order is placed (in almost every situation). It is very evident from the inputs received that the service delivery of the company is very satisfactory which is interpreted at almost 80% of high levels of satisfaction. Many of the outlets claimed that because of the service delivery process being good, they were able to maintain the required stock levels in order to meet the customer demands. The inputs collected also makes it evident that the sales force behaviour is rated well by 80% of the owners of the outlets. The good quality of the company personnel makes it easy for the owners to interact with the personnel in an effective manner. This also helps the company in grabbing more orders from the outlet. The overall distribution has been consistent & also appreciated by almost all the owners of retail outlets. This makes the company gain a larger portion of share within its vicinity and cut out the competition which in turn helps in gaining a larger market share. Coca-Cola looks to maintaining this rate of distribution & must also keep improving for better results.

It is also clearly seen from the collected data that majority of the consumption takes place at parties & half of it at house functions. The study reveals that the monthly consumption per them consume at least two bottles per week which is a good sign for the Coca-Cola as a brand to increase its portion of share in the market. The study finds that majority of the customers are aware of most of the brands Coca-Cola has and are also well educated of its position in the market. The huge amount of brand awareness by all the consumers helps Coca-Cola in easily establishing a Sprit Share of the brand in them.

This helps Coca-Cola introduce more & better brand into the market which are sure of success. This also shows the effort the company puts in establishing a great amount of awareness for their products (through advertisements etc). Thus, Coca cola’s new product launches were aimed at

grabbing market share from competitors. Also it is found that the company is very strategic in countering the impact of its competitor’s promotional activities.

RECOMMENDATION:

Coca Cola Company can develop efficient transportation models for better and effective distribution system. Coca Cola Co. should streamline the product portfolio and some focus should be given to non performing brands. This can be done using unique sales promotion techniques.

Number of visitations of middle level management to retailers place, need to be to identify issues/concerns of retailers. Middle level management should put some effort to measure the satisfaction levels of the channel partners associated with the company. Both formal and informal approach can be used to get the feedback from channel partners.

The company must ensure they have full stock of all their products in the outlets they handle.

The company must have a speedy delivery system of its goods to the retailers at any given point of time.

Promotional campaigns must be held in order to improve the sales of products that are not moving in the market (certain brands of Coca-Cola like Nimbu Fresh etc.).

The company can provide the retailers with discounts and offers so that no one is disappointed with the company’s sales& distribution.

Strict instructions must be given to the company personnel so that they are not negligent about their work on the field and also educate them about the subsequent consequences if they do not do so.

Efficient ways to handle complaints from the retailers must be designed by the company.

The company can diversify into health drinks and food products (like PepsiCo), as consumers today are very health conscious, it be prove a good step for the company to take.

The Execution Daily process has helped in the betterment of the company personnel’s work process, which also gives a clear picture to the company while analyzing the employee work by their respective assessment scores

The Execution process has helped all the company personnel to work in a single and systematic fashion.

CONCLUSION

It has been found through this study that the daily market process has been very useful to the company in implementing a single systematic way a market developer can work. It has also been found to increase operational efficiency and provides a proper way to assess company employees in the field and their respective markets by the company. The sales and distribution network of Coca-Cola has also been found to be very strong and almost flawless.

Hindustan Coca-Cola Beverages (P) Ltd. Has had the first mover advantage when it entered the market and it has capitalized on that advantage to grab the market share. Franchisee who takes care of the company’s operations has been found to be competent and so the company does not interfere in their work. The franchisees are also required to report to the company at specific time intervals. Franchisee based operations combined with the company’s operations add strength to the overall presence of the company in the market.

The advertising campaigns are conceived, implemented by the Coca-Cola India and franchisee has no such activities. Promotional activities within every territory are under the territory office and the officials of that office are responsible for the effectiveness and successful implementation of these campaigns

Among consumer it has been found that Coca-Cola has a very good brand image and recall in comparison to other competing brands currently in the market place. Although the overall functioning of Coca-Cola as a company is very efficient, there are certain areas that can be improved. Coca-Cola India is finding it difficult to counter the competition from PepsiCo in juice beverage segment but it has distinct advantage and upper in carbonated soft drink segment. Also it is heartening to find that Coca Cola has evolved into a transnational company by being sensitive to local demands.