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CONTENTS

Sl. No. Topic

1) CERTIFICATE 2) DECLARATION 3) ACKNOWLEDGEMENT 4) CHAPTER I


o Introduction o Scope of project o Objective of project

6) CHAPTER III

o Research Methodology

7) CHAPTER IV
o Marketing survey & Data Analysis o Testing of Hypothesis

8) CHAPTER IV
o Recommendations o Suggestion

9)CONCLUSION 11) BIBLIOGRAPHY 10) QUESTIONAIRE

Declaration

I Deepak Verma declare that this project report entitled Each Dealer Survey and Relationship Management with retailers In Lucknow and is and of f original piece of work done and submitted by me towards partial fulfillment of my Post Graduate Diploma in Management , under the guidance of Mukesh Gupta(C.E)and Vikas Tondon(A.D.C) Pepsico India Ltd.

Date: Signature:

Place:

Acknowledgement

I take this opportunity to express my deep sense of gratitude to my superiors Mukesh Gupta(C.E)and Vikas Tondon(A.D.C) for their guidance and other staff of the organization for extending their valuable support and help in the preparation of this project report. I am also thankful to my family, friends and Nanda Cold Drinks (Agency PepsiCo) for extending their co-operation in completion of this project report.

Date: Place: Signature

INTRODUCTION

The FMCG sector represents consumer goods required for daily or frequent use. The main segments of this sector are personal care (oral care, hair care, soaps, cosmetics, toiletries), household care (fabric wash and household cleaners), branded and packaged food, beverages (health beverages, soft drinks, staples, cereals, dairy products, chocolates, bakery products) and tobacco. The Indian FMCG sector is an important contributor to the country's GDP. It is the fourth largest sector in the economy and is responsible for 5% of the total factory employment in India. The industry also creates employment for 3 m people in downstream activities, much of which is disbursed in small towns and rural India. This industry has witnessed strong growth in the past decade. This has been due to liberalization, urbanization, increase in the disposable incomes and altered lifestyle. Furthermore, the boom has also been fuelled by the reduction in excise duties, de-reservation from the small-scale sector and the concerted efforts of personal care companies to attract the burgeoning affluent segment in the middle-class through product and packaging innovations. Unlike the perception that the FMCG sector is a producer of luxury items targeted at the elite, in reality, the sector meets the every day needs of the masses. The lower-middle income group accounts for over 60% of the sector's sales. Rural markets account for 56% of the total domestic FMCG demand. Many of the global FMCG majors have been present in the country for many

decades. But in the last ten years, many of the smaller rung Indian FMCG companies have gained in scale. As a result, the unorganized and regional players have witnessed erosion in market share. History of FMCG in India In India, companies like ITC, HLL, Colgate, Cadbury and Nestle have been a dominant force in the FMCG sector well supported by relatively less competition and high entry barriers (import duty was high). These companies were, therefore, able to charge a premium for their products. In this context, the margins were also on the higher side. With the gradual opening up of the economy over the last decade, FMCG companies have been forced to fight for a market share. In the process, margins have been compromised, more so in the last six years (FMCG sector witnessed decline in demand). Current Scenario The growth potential for FMCG companies looks promising over the long-term horizon, as the per-capita consumption of almost all products in the country is amongst the lowest in the world. As per the Consumer Survey by KSA-Technopak, of the total consumption expenditure, almost 40% and 8% was accounted by groceries and personal care products respectively. Rapid urbanization, increased literacy and rising per capita income are the key growth drivers for the sector. Around 45% of the population in India is below 20 years of age and the proportion of the young population is expected to increase in the next five years. Aspiration levels in this age group have been fuelled by greater media exposure, unleashing a latent demand with more money and a new mindset. In this backdrop, industry estimates suggest that the industry could triple in value by 2015 (by some estimates, the industry could double in size by 2010). In our view, testing times for the FMCG sector are over and driving rural penetration will be the key going forward. Due to infrastructure constraints (this influences the cost-effectiveness of the supply chain), companies were unable to grow faster. Although companies like HLL and ITC have dedicated

initiatives targeted at the rural market, these are still at a relatively nascent stage. The bottlenecks of the conventional distribution system are likely to be removed once organized retailing gains in scale. Currently, organized retailing accounts for just 3% of total retail sales and is likely to touch 10% over the next 3-5 years. In our view, organized retailing results in discounted prices, forced-buying by offering many choices and also opens up new avenues for growth for the FMCG sector. Given the aggressive expansion plans of players like Pantaloon, Trent, Shoppers Stop and Shoprite, we are confident that the FMCG sector has a bright future. Budget Measures to Promote FMCG Sector 2% education cess corporation tax, excise duties and custom duties Concessional rate of 5% custom duty on tea and coffee plantation machinery

Budget Impact The education cess will add marginally to the tax burden of all FMCG companies The dividend distribution tax on debt funds is likely to adversely effect the other income components of companies like Britannia, Nestle and HLL The measure to abolish excise duty on dairy machinery is a positive for companies like Nestle Concessional rate for tea and coffee plantation machinery is a positive for Tata Tea, HLL, Tata Coffee and other such companies Duty reduction in food grade hexane will have a marginally positive impact on companies like Marico and HLL Area specific excise exemptions for North East, J&K, Himachal Pradesh will continue to encourage FMCG companies to relocate to these areas. Budget over the years Budget 2001-02 From 35-55% to Budget 2002-03 Increased focus Budget 2003-04 Excise on

75% for crude edible oil From 45-65% to 85% for refined edible oil From 35% to 70% for copra, coconut, tea and coffee From 25% to 55% for crude palm oil Development allowance of tea industry raised to 40% from 20% All food preparations based on fruits and vegetables (pickles, sauces, ketchup, juices, jams etc.) made completely exempt from excise duty

on agricultural reforms with an aim to integrate the countrywide food market Deregulation of the milk processing capacity Excise duty structure largely untouched. Only for tea, the duty was reduced from Rs 2 per Kg to Re 1 Customs duty on tea and coffee doubled to 100% Duty on imported pulses upped to 80% Import duty on wine and liquor slashed from 210% to 180%

biscuits reduced to 8% from 16%. Excise on soft drinks and sugar boiled confectionery also reduced All states to switch to VAT in FY04 (deadline now has been extended till end FY05) Loans to agriculture and to small-scale sector will now be available at maximu 2% above prime lending rate (PLR) Development plans for roads, ports, railways and airports

Customs duty on Excise on alcoholic cosmetics and beverages toiletries halved reduced to 16% India offers a large and growing market of 1 billion people of which 300 million are middle class consumers. India offers a vibrant market of youth and vigor with 54% of population below the age of 25 years. These young people work harder, earn more, spend more and demand more from the market, making India a dynamic and aspirational society. Domestic demand is expected to double over the ten-year period from 1998 to 2007. The number of households with "high income" is expected to increase by 60% in the next four years to 44 million households. India is rated as the fifth most attractive emerging retail market. It has been ranked second in a Global Retail Development Index of 30 developing countries drawn up by A T Kearney. A.T. Kearney has estimated

India's total retail market at $202.6 billion, is expected to grow at a compounded 30 per cent over the next five years. The share of modern retail is likely to grow from its current 2 per cent to 15-20 percent over the next decade, analysts feel. The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.1 billion. The FMCG market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015. Penetration level as well as per capita consumption in most product categories like jams, toothpaste, skin care, hair wash etc in India is low indicating the untapped market potential. Burgeoning Indian population, particularly the middle class and the rural segments, presents an opportunity to makers of branded products to convert consumers to branded products. India is one of the worlds largest producers for a number of FMCG products but its FMCG exports are languishing at around Rs 1,000 crore only. There is significant potential for increasing exports but there are certain factors inhibiting this. Small-scale sector reservations limit ability to invest in technology and quality up gradation to achieve economies of scale. Moreover, lower volume of higher value added products reduce scope for export to developing countries. The FMCG sector has traditionally grown at a very fast rate and has generally out performed the rest of the industry. Over the last one year, however the rate of growth has slowed down and the sector has recorded sales growth of just five per cent in the last four quarters. The outlook in the short term does not appear to be very positive for the sector. Rural demand is on the decline and the Centre for Monitoring Indian Economy (CMIE) has already downscaled its projection for agriculture growth in the current fiscal. Poor monsoon in some states, too, is unlikely to help matters. Moreover, the general slowdown in the economy is also likely to have an adverse impact on disposable income and purchasing power as a whole. The growth of imports constitutes another problem area and while

so far imports in this sector have been confined to the premium segment, FMCG companies estimate they have already cornered a four to six per cent market share. The high burden of local taxes is another reason attributed for the slowdown in the industry At the same time, the long term outlook for revenue growth is positive. Give the large market and the requirement for continuous repurchase of these product

Type Founded Headquarters Key people Industry Products: Pepsi

Public (NYSE: PEP) 1965 New York, USA Indra Nooyi, Food and beverage

Chairwoman, President & CEO

Tropicana Products Gatorade Lay's Doritos Frappuccino (for Starbucks) Mountain Dew Operating income $6.44 billion USD (2006) Net income profit margin Employees GROUP OF COMPANIES Frito-Lay North America $5.64 billion USD (2006) 16.06% 153,000(2005)

PepsiCo Beverages North America, PepsiCo International Quaker Foods North America

Mission

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The main objective of the company is to provide best quality products to its consumer. Another objective is to provide healthy rewards to its investor, good reward to its employee and other investor and partners who financially help the company

Vision

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The vision of the company is to improve in all aspects in which they operate. By improving in social and economical environment, they want to make tomorrow better than today.

A Brief Pepsi History


In 1893, Caleb Bradham,a young pharmacist from New Bern, North Carolina, begins experimenting with many different soft drink concoctions. Like many pharmacists at the turn of the century he had a soda fountain in his drugstore, where he served his customers refreshing drinks, that he created himself. His most popular beverage was something he called "Brad's drink" made of carbonated water, sugar, vanilla, rare oils, pepsin and cola nuts. One of Caleb's formulations, known as "Brad's drink", created in the summer of 1893, was later renamed Pepsi Cola after the pepsin and cola nuts used in the recipe. In 1898, Caleb Bradham wisely bought the trade name "Pep Cola" for $100 from a competitor from Newark, New Jersey that had gone broke. The new name was trademarked on June 16th, 1903. Bradham's neighbor, an artist designed the first Pepsi logo and ninetyseven shares of stock for Bradham's new company were issued. 1898 - One of Caleb's formulations, known as "Brad's Drink," a combination of carbonated water, sugar, vanilla, rare oils

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and cola nuts, is renamed "Pepsi-Cola" on August 28, 1898. Pepsi-Cola receives its first logo. 1905 - Pepsi-Cola's first bottling franchises are established in Charlotte and Durham, North Carolina. Pepsi receives its new logo, its first change since 1898. 1906 - Pepsi gets another logo change, the third in eight years. The modified script logo is created with the slogan, "The Original Pure Food Drink." 1908 - Pepsi-Cola becomes one of the first companies to modernize delivery from horse drawn carts to motor vehicles. Two hundred fifty bottlers in 24 states are under contract to make and sell Pepsi-Cola. 1910 - The first Pepsi-Cola bottlers' convention is held in New Bern, North Carolina. 1920 - Pepsi theme line speaks to the consumer with "Drink Pepsi-Cola, it will satisfy you." 1928 - After five continuous losing years, Megargel reorganizes his company as the National Pepsi-Cola Company, becoming the fourth parent company to own the Pepsi trademark. 1934 - A landmark year for Pepsi-Cola. The drink is a hit and to attract even more sales, the company begins selling its 12-ounce drink for five cents (the same cost as six ounces of competitive colas). The 12-ounce bottle debuts in Baltimore, where it is an instant success. The cost savings proves irresistible to Depression-worn Americans and sales skyrocket nationally. Caleb Bradham, the founder of Pepsi-Cola and "Brad's Drink," dies at 66 (May 27th,

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1867-February 19th, 1934). 1935 - Guth moves the entire Pepsi-Cola operation to Long Island City, New York, and sets up national territorial boundaries for the Pepsi bottler franchise system. 1936 - Pepsi grants 94 new U.S. franchises and year-end profits reach $2,100,000. In 1940, the Pepsi Cola company made history when the first advertising jingle was broadcast nationally on the radio. The jingle was "Nickel Nickel" an advertisement for Pepsi Cola that referred to the price of Pepsi and the quantity for that price "Nickel Nickel" became a hit record and was recorded into fifty-five languages. 1941 The New York Stock

Exchange trades Pepsi's stock for the first time. In support of the war effort, Pepsi's bottle crown colors change to red, white, and blue. 1942 - One on many company sponsored efforts to allow soldiers to communicate with friends or family. This record was made in New York City but often booths would be set up with mobile recording equipment that was bought to where the soldiers were. Shell material on solid core. 78 rpm. 1943 - Pepsi's theme line becomes "Bigger Drink, Better Taste." 1948 - Corporate headquarters moves from Long Island City, New York, to midtown Manhattan.

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1950 - Alfred N. Steele becomes President and CEO of Pepsi-Cola. Mr. Steele's wife, Hollywood movie star Joan Crawford, is instrumental in promoting the company's product line. Pepsi receives its new logo, which incorporates the "bottle cap" look. The new logo is the fifth in Pepsi history. 1953 - "The Light Refreshment" campaign capitalizes on a change in the product's formula that reduces caloric content. 1955 - Herbert Barnet is named President of Pepsi-Cola. 1959 - Pepsi debuts at the Moscow Fair. Soviet Premier Khrushchev and U.S. Vice President Nixon share a Pepsi. 1960 - Young adults become the target consumers and Pepsi's advertising keeps pace with "Now it's Pepsi, for those who think young." 1962 - Pepsi receives its new logo, the sixth in Pepsi history. The 'serrated' bottle cap logo debuts, accompanying the brand's groundbreaking "Pepsi Generation" ad campaign. 1963 - After climbing the Pepsi ladder from fountain syrup salesman, Donald M. Kendall is named CEO of Pepsi-Cola Company. Pepsi-Cola continues to lead the soft drink industry in packaging innovations, when the 12-ounce bottle gives way to the 16-ounce size. Twelve-ounce Pepsi cans are first introduced to the military to transport soft drinks all over the world. 1964 - Diet Pepsi, introduced as America's first national diet soft drink. Pepsi-Cola acquires Mountain Dew from the Tip Corporation.

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1965 - Expansion outside the soft drink industry begins. Frito-Lay of Dallas, Texas, and Pepsi-Cola merge, forming PepsiCo, Inc.

Military 12-ounce cans are such a success that full-scale commercial distribution begins. Mountain Dew launches its first campaign, "Yahoo Mountain Dew...It'll tickle your innards." 1970 - Pepsi leads the way into metrics by introducing the industry's first two-liter bottles. Pepsi is also the first company to respond to consumer preference with light-weight, recyclable, plastic bottles. Vic Bonomo is named President of Pepsi-Cola. The Pepsi World Headquarters moves from Manhattan to Purchase, NY. 1974 - First Pepsi plant opens in the U.S.S.R. Television ads introduce the new theme line, "Hello, Sunshine, Hello Mountain Dew." 1976 - Pepsi becomes the single largest soft drink brand sold in American supermarkets. The campaign is "Have a Pepsi Day!" and a classic commercial, "Puppies," becomes one of America's best-loved ads. As people get back to basics, Pepsi is there as one of the simple things in life. 1977 - At 37, marketing genius John Sculley is named President of PepsiCola. 1978 - The company experiments with new flavors. Twelve-pack cans are introduced. 1980 - Pepsi becomes number one in sales in the take home market.

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1981 - PepsiCo and China reach agreement to manufacture soft drinks, with production beginning next year. 1982 - Pepsi Free, a caffeine-free cola, is introduced nationwide. Pepsi Challenge activity has penetrated 75% of the U.S. market. 1984 - Pepsi advertising takes a dramatic turn as Pepsi becomes "the choice of a New Generation." Lemon Lime Slice, the first major soft drink with real fruit juice, is introduced, creating a new soft drink category, "juice added." In subsequent line of extensions, Mandarin Orange Slice goes on to become the number one orange soft drink in the U.S. Diet Pepsi is reformulated with NutraSweet (aspertame) brand sweetener. 1985 - After responding to years of decline, Coke loses to Pepsi in preference tests by reformulating. However, the new formula is met with widespread consumer rejection, forcing there-introduction of the original formulation as "Coca-Cola Classic." The cola war takes "one giant sip for mankind," when a Pepsi "space can" is successfully tested aboard the space shuttle. By the end of 1985, the New Generation campaign earns more than 58 major advertising and film-related awards. Pepsi's campaign featuring Lional Richie is the most remembered in the country, according to consumer preference polls.. 1987 - Pepsi-Cola President Roger Enrico is named President/CEO of PepsiCo Worldwide Beverages. Pepsi-Cola World Headquarters moves from Purchase to Somers, New York. After a 27 year absence, Pepsi returns to Broadway with the lighting of a spectacular new neon sign in Times Square. 1988 - Craig Weatherup is appointed President/CEO of Pepsi-Cola Company. 1989 - Pepsi lunges into the next decade by declaring Pepsi lovers "A Generation Ahead." Chris Sinclair is named President of Pepsi-Cola

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International. Pepsi-Cola introduces an exciting new flavor, Wild Cherry Pepsi. 1990 - American Music Award and Grammy winner rap artist Young MC writes and performs songs exclusively for national radio ads for Pepsi. Ray Charles joins the Pepsi family by endorsing Diet Pepsi. The slogan is "You Got The Right One Baby." 1991 - Craig E. Weatherup is named CEO of Pepsi-Cola North America, as Canada becomes part of the company's North American operations. Pepsi introduces the first beverage bottles containing recycled polyethylene terephthalate (or PET) into the marketplace. The development marks the first time recycled plastic is used in direct contact with food in packaging. 1992--Pepsi-Cola launches the "Gotta Have It" theme which supplants the longstanding "Choice of a New Generation." 1993 - Brand Pepsi introduces its slogan, "Be Young. Have Fun. Drink Pepsi." Pepsi-Cola profits surpass $1 billion. Pepsi introduces an innovative 24-can multipack that satisfies growing consumer demand for convenient large-size soft drink packaging. "The Cube" is easier to carry than the traditional 24-pack and it fits in the refrigerator. 1994 - New advertising introducing Diet Pepsi's freshness dating initiative features Pepsi CEO Craig Weatherup explaining the relationship between freshness and superior taste to consumers. Pepsi Foods International and Pepsi-Cola International merge, creating the PepsiCo Foods and Beverages Company. 1995 - In a new campaign, the company declares "Nothing else is a Pepsi" and takes top honors in the year's national advertising championship. 1996 - In February of this year, Pepsi makes history once again, by

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launching one of the most ambitious entertainment sites on the World Wide Web. Pepsi World eventually surpasses all expectations, and becomes one of the most landed, and copied, sites in this new media, firmly establishing Pepsi's presence on the Internet. 1997 - In the early part of the year, Pepsi pushes into a new era with the unveiling of the GeneratioNext campaign. GeneratioNext is about everything that is young and fresh; a celebration of the creative spirit. It is about the kind of attitude that challenges the norm with new ideas, at every step of the way. PepsiCo. announces that, effective October 6th, it will spin off its restaurant division to form Tricon Global Restaurants, Inc. Including Pizza Hut, Taco Bell, & KFC, it will be the largest restaurant company in the world in units and second-largest in sales. 1998 - Pepsi celebrates its 100th anniversary. PepsiCo. Chairman and CEO Roger A. Enrico donates his salary to provide scholarships for children of PepsiCo employees. Pepsi introduces PepsiOne the first one calorie drink without that diet taste! 2000 - Although Pepsi is a great place to work, Steven Truitt (aka 'struitt') takes his skills and hard work elsewhere (for more money of course!), therefore putting an end to his Pepsi page! For more information about Pepsi, choose a search engine and search for 'Pepsi' or visit www.pepsi.com or www.pepsico.com. 2005 - Pepsi invited to introduce new brand cola

PEPSICO IN INDIA

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PepsiCo gained entry to India in 1988 by creating a joint venture with the Punjab government-owned Punjab Agro Industrial Corporation (PAIC) and Voltas India Limited. This joint venture marketed and sold Lehar Pepsi until 1991, when the use of foreign brands was allowed; PepsiCo bought out its partners and ended the joint venture in 1994. Others claim that firstly Pepsi was banned from import in India, in 1970, for having refused to release the list of its ingredients and in 1993, the ban was lifted, with Pepsi arriving on the market shortly afterwards. These controversies are a reminder of "India's sometimes acrimonious relationship with huge multinational companies." Indeed, some argue that PepsiCo and The Coca-Cola Company have "been major targets in part because they are well-known foreign companies that draw plenty of attention." In 2003, the Centre for Science and Environment (CSE), a nongovernmental organization in New Delhi, said aerated waters produced by soft drinks manufacturers in India, including multinational giants PepsiCo and The Coca-Cola Company, contained toxins, including lindane, DDT, malathion and chlorpyrifos pesticides that can contribute to cancer, a breakdown of the immune system and cause birth defects. Tested products included Coke, Pepsi, 7 Up, Mirinda, Fanta, Thums Up, Limca, and Sprite. CSE found that the Indian-produced Pepsi's soft drink products had 36 times the level of pesticide residues permitted under European Union regulations; Coca Cola's 30 times. CSE said it had tested the same products in the US and found no such residues. However, this was the European standard for water, not for other drinks. No law bans the presence of pesticides in drinks in India. The Coca-Cola Company and PepsiCo angrily denied allegations that their products manufactured in India contained toxin levels far above the norms permitted in the developed world. But an Indian parliamentary committee, in 2004, backed up CSE's findings and a government-appointed committee, is now trying to develop the world's first pesticides standards for soft drinks. Coke and PepsiCo opposed the move, arguing that lab tests aren't reliable enough to detect minute traces of pesticides in complex drinks. On

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December 7, 2004, India's Supreme Court ruled that both PepsiCo and competitor. The Coca-Cola Company must label all cans and bottles of the respective soft drinks with a consumer warning after tests showed unacceptable levels of residual pesticides.[citation needed] Both companies continue to maintain that their products meet all international safety standards without yet implementing the Supreme Court ruling.[citation needed] As of 2005, The Coca-Cola Company and PepsiCo together hold 95% market share of soft-drink sales in India. PepsiCo has also been alleged[attribution needed] to practice "water piracy" due to its role in exploitation of ground water resources resulting in scarcity of drinking water for the natives of Puthussery panchayat in the Palakkad district in Kerala, India. Local residents have been pressuring the government to close down the PepsiCo unit in the village. In 2006, the CSE again found that soda drinks, including both Pepsi and Coca-Cola, had high levels of pesticides in their drinks. Both PepsiCo and The Coca-Cola Company maintain that their drinks are safe for consumption and have published newspaper advertisements that say pesticide levels in their products are less than those in other foods such as tea, fruit and dairy products. In the Indian state of Kerala, sale and production of Pepsi-Cola, along with other soft drinks, has been banned. Five other Indian states have announced partial bans on the drinks in schools, colleges and hospitals. 3.1 Highlights of PepsiCo in India: World leader - Convenient Foods and Beverages Revenues of more than $35 billion

More than 1,68,000 employees

Available in nearly 200 countries and territories Groups 37 bottling plants in India 16 are company owned and 21 are franchisee owned

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Tropicana was acquired in 1998 and PepsiCo merged with The Quaker Oats Company in 2001 Generates direct employment for more than 4000 people in India and indirect employment for 60,000 people Set up 8 greenfield sites in backward regions of different states. PepsiCo intends to expand its operations and is planning an investment of approximately US$ 150 million in the next two-three years. Annual exports from India are worth over U.S$60 million PepsiCo Founded in 1965 through the merger of Pepsi-Cola and FritoLay PepsiCo entered India in 1989

THE MARKETING MIX-4 PS WITH SPECIAL REFERENCE TO PEPSI:

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Product:
A business needs to consider the products that it produces and the stage of the product life cycle that a product is at. Marketing strategies will vary according to the type of product and its stage in the life cycle. In case of Pepsi, in the rural markets, the 300ml bottle and now days the new small or commonly known as the chota pepsi is very much popular. The Pepsi Co. is even thinking of introducing their new Pepsi-Aha, but presently they are concentrating more on the normal pepsi as the rural market is a niche market. Pepsi is even successful in introducing the big 1-1.5 liter PET bottles in the rural markets. These big bottles are very popular during big festivals and marriages.

Price:
Most businesses use a "cost plus" method for setting the prices of their products. This involves determining unit production costs and then adding in a profit margin. However, many other factors are

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involved. Consider "perceived price" (what you think consumers will be prepared to pay), demand elasticity (is it elastic or inelastic?), competitors' pricing (can you afford to undercut their prices?), pricing objectives (what do you want to achieve increased market share? increased profits? market leadership? etc.) Example 2 Perfume How much does it cost to make? Can businesses afford a "price war"? Why is Coca Cola so successful?

As far as the pricing goes, the 300 ml Pepsi bottle is priced at Rs. 10. But the company soon realized that this pricing worked in the urban markets but not in the rural markets as in the rural markets, Pepsi is not a necessity but a luxury. They found out that people in the rural markets bought cold drinks only if there was some occasion. A price point of Rs 10 for a 300 ml bottle has proved a major deterrent: it has kept away new consumers in the urban and semi-urban pockets, and it has blanked out the far larger rural markets where annual per capita consumption is less than a bottle. So the Rs. 10 bottle was not that successful. But their sales increased after introducing the chota Pepsi. This 200ml Pepsi was reasonably priced between Rs.5- Rs.7. This was a major weapon for the expansion of the rural market. Pepsi expects the small-size offering to account for 30 per cent of volumes this year compared with 18 per cent last year. But there are other areas of concern principally that the 200 ml offering should not cannibalize 300 ml sales. In that case, there will be no market growth. That is why pricing could be crucial. Pepsi, for instance, has reckoned that giving consumers 33 per cent (100 ml) less cola at 50 per cent of the price (Rs 5) is not a sustainable option and can, at best, be used as an introductory offer. The conclusion is based on hard facts. Last year, the beverage giants test-marketed 200 ml bottles at a price of Rs 5. Instead of growth, Pepsi discovered that 300 ml drinkers merely shifted to the 200 ml variant, the market remained stagnant and everyone lost money. The conclusion was clear: cutting prices does not necessarily expand the market.

Place
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This generally refers to the physical locations of product sales as well as the methods of distribution. However, it is also considered to be the "place" or "position" in the market of the product; refer to information below. Businesses need to make many decisions related to "place": access, parking, competition, physical location etc.

Its the most important P in the cola wars Place. And nothing evokes more passion in Pepsi and Coke than distribution. Major innovation is underway on the distribution front at Pepsi, pre-selling being the biggest of all. Its been successfully test marketed in Bangalore, Baroda and Coimbatore and may soon roll out nationally. In case of the distribution network, there is no involvement of wholesalers in the distribution of products. It is more like an agent network. The companies have divided the country into various regions and established a franchisee in each region. The franchisees have their own bottling plants and manage all the day-to-day operations. However, of late, the soft drinks companies have started setting up company owned bottling units have been acquiring some of its franchise bottles. In the current system, the strike rate in the Delhi market is about 40 per cent, which can be improved to 80 per cent in the peak season, claims a franchise director. The result for Pepsi could be significant

savings. Colas service just 7.5-8 lakh accounts compared to the other FMCG players who service three times the number. Innovation in our distribution system will take us closer to the 21 lakh figure, says Vats, a franchise director. Pepsi believes in direct distribution whereas Coke doesnt. It mainly concentrates on dealers and most importantly cutting costs. There are plenty of innovations possible in distribution that can cut costs, says a Pepsi official. For Pepsi, the rural market is a chosen thrust this year. It has targeted to reach 20 to 28 per cent of the rural population in the first year of this operation. In the first stage, the corporation is planning a massive roll out in villages with populations of 5000. To do this effectively, Pepsi is focusing on establishing a cold chain. The company has developed special freezers that allow its products to stay chilled despite power cuts of three to four hours. It will also

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use traditional iceboxes to sell its product in rural India. For the rural markets, Pepsi is looking at the wholesale route since the logistics of direct distribution are too huge to handle in the interiors.

Promotion
This refers to the promotion of the product to the target market. This is achieved through a combination of: advertising: use of electronic and print media. The "reach" (how many people will see the advert), frequency (how many times will I advertise the product?) and impact of the advertising must also be evaluated. Personal selling: what happens in the "shop", contact between sales people and consumers or customers. Sales promotion: use of gimmicks and incentives e.g. competitions. Sponsorship and promotional licensing: including specific products sold under license that promotes the business (e.g. football jumpers). Publicity or public relations: "adversarial" in local papers or special promotional materials.

Due to the cola wars promotion, and advertising has always been an integral part for both the cola cos: Pepsi and Coke. But for the first time perhaps in the history of cola wars, the strategies of the two giant cos are diverging in India. Whether its business or product strategies or the critical distribution game plan, the archrivals are taking roads that do not meet. Mr. Bakshi of Pepsi Co. is bringing a change in their distribution and marketing strategies. Now days where Coke is concentrating more on the 200ml bottle, Mr. Bakshi of Pepsi says The 200ml bottle gets zero demand in the rural market. He is concentrating on the 1.0 liter bottles of Pepsi. The Pepsi Co. had used an excellent marketing strategy here. During the Lagaan mania they were distributing free tickets in the rural markets along with their 1.5-liter PET bottles. Pepsi made this 1.5-liter PET bottle very famous for their special festive occasions and marriage. Well the popularity of the product has also increased due to their advertisements or basically famous cricket and bollywood personalities endorsing this product. For instance the Sachin Aala re Aala advertisement where even he is wearing a mask along with those rural kids. Or you can even take the new Sachin and Amitabh Bachchan advertisement where both of them say Yeh Dil Maange More!!!!!!! Sachin has done many advertisements for Pepsi in the span of 10 years. Pepsis rural market advertisement- Pepsi has unveiled a major campaign in Andhra Pradesh, roping in top Telugu film star, Pawan 26

Kalyan, even as the star's elder brother, Chiranjeevi, is into pushing CocaCola's Thums Up. Pawan Kalyan, however, ruled out any rivalry between him and his brother. Though he will sing Yeh Dil Maange more, his brother will say Yeh Dil Maange no more. We have our lives and we have our own choices, he said on the possible in-house cola feud Pepsi also kicked off a rural campaign, spread over two months. Decorated Pepsi vans will roll out into market of the State. Every consumer drinking a Pepsi from these vans will get to play a game and win prizes. These include Pawan Kalyan memorabilia, T-shirts, autographed posters and calendars. Explaining the reason for choosing Pawan Kalyan to endorse Pepsi, Mr. Rohit Ohri, Director HTA, Pepsi's ad agency, said Pepsi and Pawan Kalyan were going to be an ideal combination. Both are so youthful, energetic and fun-loving, he said. Mr. Vijay Shanker Subramaniam, Vice-President (Marketing), Pepsi Foods Ltd, said the company was starting an aggressive campaign in Andhra Pradesh. Apart from the van operations, which were flagged off by Pawan Kalyan, other campaigns have been lined up throughout the year. Later, Pawan Kalyan presented a cheque for Rs 5 lakh to Mr. Mehmood Ali, a mechanic with the Andhra Pradesh State Road Transport Corporation for winning Pepsi's Mera number ayega campaign. Lastly, we all know that though Coke ranks 1st with 57 % of the market share (which includes Thums up too), Pepsi ranks 2nd with 43% of the market share. The Pepsi Co. has fought a bitter struggle upwards starting from a zero market share. When Pepsi entered the market in 1989, they faced the daunting task of pacifying Indian swadeshi activists alone. Their trucks were smashed and offices ransacked so as to dissuade them from entering the Indian market. Whereas when Coke entered (or re-entered) the Indian market in 1993, the situation had been smoothed out by Pepsi already, and the atmosphere was extremely conducive to foreign multinationals coming to India. Therefore, though Coke ranks 1st, it got this position only after introducing the Parle products who already had a 70% market share at that point of time. Presently Pepsi Co. is also concentrating on its other products like slice, mirinda and aquafina. Their next aim is to popularize their other products like sodas, then the new Pepsi Aha- the apple drink and beat coke to become the new market leader.

Highlights of Indian FMCG sector:

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The Indian FMCG sector - the fourth largest sector in the economy market size > $13.1 bn Strong MNC presence Well established distribution network Intense competition between the organized and unorganized segments 200 million people expected to shift to processed and packaged food by 2010 Low operational cost. India needs around $28 billion of investment in the food-processing industry. FOOD AND BEVERAGES Size of the Indian food processing industry- $ 65.6 billion, including $20.6 billion of value added products. The health beverage industry -$230 million Bread and biscuits at $1.7 billion Chocolates at $73 million Ice creams at $188 million. The size of the semi-processed/ready-to-eat food segment - over $1.1 billion. Three largest consumed categories of packaged foods are packed tea, biscuits and soft drinks. Total soft drink market is estimated at 284 million crates a year or $1 billion.

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4. ORGANIZATIONAL STRUCTURE

Unit Manager

Territory Development Manager

Marketing Development Manager

Assistant Sales and Development Manager

Marketing Development Coordinator

Customer Executives

Sales Trainees

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5. PEPSICOS DISTRIBUTION SYSTEM

PepsiCos Plant Indenti ng


Primary Sale

Distributor

Market / Retailers

Secondar y Sale

Consumer

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6. PEPSICOS PRODUCTS

Following are main products of Pepsi co(india) pvt limited. Pepsi Mirinda Orange Mirinda Lemon 7 Up Mountain Dew Slice Mirinda Sorbet (Limited Edition) Pepsi Gold (Limited Edition) Pepsi Diet Lehar Soda Aquafina Tropicana Gatorade Lehar Namkeen Lays Kurkure Uncle Chips Cheetos

7. RETAIL CHANNEL
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Conveni ence Channel Grocery Channel Eatery Channel

Convenience channel includes different kiosks are which is convenient to general public.

Grocery channel includes different grocery shops .

Eatery channel includes different hotels, restaurants etc.

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Sales Management Recruitment Procedure


There are three main line for recruitment of the Sales trainee of the company Campus Interview Consultant Employee of the Company Campus Interviews: The company recruits students from various institutes of professional courses like MBA. The selection procedure includes GD & personal interviews followed by HR interviews. Consultants: The company has tie-ups with professional consultants which provide a high prospector base for recruitment. The low level & the middle level employees are recruited through this procedure. Employees of the company: Mostly the top level employees are selected from inside the company since the company can get loyal persons having the experience of the companys work culture.

Training
There are mainly two types of method for giving training to their employee On the Job training and Classroom training through lectures.

Evaluation
There is a evaluation form in which different objectives of the company are written. At the end of the year, immediate officer just tally whether a particular objectives of which predetermine objectives are achieved or not.

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Sales Quota
In company, sales quota is decided on the basis of the sales of the last year. After considering sales of the company, they analyze the growth of the market. On the basis of the sales and growth of the market, company decides sales quota for the next year. On the basis of the sales quota, target of each area is decided.

Sales territory:
Sales territory is decided on the basis of the no. of the distributor in the particular territory. Normally distributor has to cover 40 outlets per day per Route driver. In particular territory, routes are decided by the company. Like Route A Route B Route C. Route Driver (RD) of the company visits particular route twice in a week. Route Driver distributes products as per requirements of the outlets.

LOAD INS:
RA to return to the Warehouse after completing the days runs as per the Route Planner. Requisition forms shall be updated with quantity of unsold stock and empties brought back to Warehouse and shall be submitted to checker. Checker shall independently verify the stock brought in by the RA and record the physically verified Stock in the checkers report. The Load in slip needs to be signed by the RA, Checker and the settlement clerk. Settlement clerk / Warehouse manager to reconcile physical stock vis- a-vis stock as per Requisition Form. Checker shall update the Gate Pass section of DSS with details of actual load ins and empties and submit to the ASDOS clerk.

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INVENTORY CONTROL MANAGEMENT / ACCOUNTING OF EXPIRED STOCKS


Warehouse separately. Stock supervisor to co-ordinate with Warehouse manager and submit report of expired stock to TDM & SAM. Details of all expired products needs to be sent to MU control Group as per Authority Matrix MU control group to forward the same to BU for approvals. Post approval from BU, expired stocks will be drained at warehouses in presence of PI employee. Sales accounting Manager shall be the FPR for issuing instructions to warehouses for draining of stocks. Manager to ensure that expired stock is stored

MARKET AUDIT
Market audit is carried out through deployment of external resources/ internal resources. Market Audit must be done for the following claims: Card Discounts Scheme Discounts Spoke Commission Market Auditors to show the report to the CE and the TDM for their comments on the market audit done and obtain their signature on the report. At the end of every month, the market auditors must provide the report of each and every distributor audited against the plan given at the beginning of the month to the UFM/SAM

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EACH

DEALER

SURVEY

AND WITH

RELATIONSHIP RETAILERS

MANAGEMENT

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SCOPE OF PROJECT
1. Detailed study of the noncarbonated soft drinks industry in India 2. Analysis of Pepsis performance against the other prevailing noncarbonated Soft drinks brands in the country. 3. Evaluate the performance of Agency performance and compare with the market size in the area. 4. Find out the problems in the area related to retailers.

OBJECTIVES OF THE PROJECT


1- Survey of each dealer and retailer in the area allotted. 2- Create good relationship with Retailers. 3. Sell the products to the retailers who are not willing to buy Pepsi product.

Research Methodology
SAMPLING

Basic sampling Term

SAMPLE AND SAMPLE SURVEY


o A part of a population, or a subset from a set of units, which is provided by some process or other, usually by deliberate selection

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with the object of investigating the properties of the parent population or set. o Sample survey refers to the survey which is carried out using a sampling method, i.e. in which a portion only, and not the whole population, is surveyed.

POPULATION
o In statistical usage the term population is applied to any finite or infinite collection of individuals. o It has displaced the older term universe, which is derived from the universe of discourse of logic. o It is practically synonymous with aggregate and does not necessarily refer to a collection of living organisms.

SAMPLING UNIT
o One of the units into which an aggregate is divided or regarded as divided for the purposes of sampling, each unit being regarded as individual and indivisible when the selection is made. o The definition of unit may be made on some natural basis, or on some arbitrary basis. o In the case of multi-stage sampling the units are different at different stages of sampling.

SAMPLING FRAME
o A list, map or other specification of the units, which constitute the available information relating to the population designated for a particular sampling scheme.

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o The nature of the frame exerts a considerable influence over the structure of a sample survey. o In multi-stage sampling it is sometimes possible to construct the frame at higher stages during the progress of the sample survey itself.

SAMPLING DESIGN
o A sample design is a definite plan for obtaining a sample from the sampling frame. o It refers to the technique or the procedure the researcher would adopt in selecting some sampling units from which inferences about the population is drawn.

STATISTIC AND PARAMETER


o A statistic is a characteristic of a sample. o A parameter is a characteristic of a population. o To obtain the estimate of a parameter from a statistic constitutes the prime objective of sampling analysis.

METHODOLOGY:
DATA COLLECTION 1) Primary Source
Retailers Whole sellers 2) Secondary Source

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No Secondary Source

RESEARCH INSTRUMENTS
Questionnaires . FAQs (Frequently asked questions)

SAMPLING PLAN 1) Sampling Unit: Who is to be surveyed? Urban Retailers 2) Sample Size: How many people to be surveyed?
All retailers in the area

(of all age groups)

3) Sampling Procedure:
We have taken sample from following areas:

1) Alambagh main 2) Azad Nagar 3) R.D.S.O 4) Tedhi Pulia


5) Geetapalli

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Total Number of Shops In The Area - 246 Warm Stock-15543 units Cold Stock in Refrigerator-6743 units Total Stock- 22286 Units

Retailers preference (On the basis of the stocks they have in the shop) Pepsi 65% Coca-cola 35%

35% 65%

Pepsi coca-cola

Sign Board on Shop

114 shops has signboards of any company


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Pepsi 81% (75 Shops) Coca-cola 19% (39 shops)

19% 81% sign board pepsi


sign board cocacola

Refrigerator in Shop80 shops has refrigerator Pepsi-73% (58shops) Coca-cola-27% (22 Shops)

27%
Visi Pepsi

73%

Visi Coca-Cola

Warm StockPepsi-59%(9170 units) Coca-Cola- 41%(6372 units)


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41% 59%

warm Stock Pepsi warm Stock Coca-Cola

Cold StockPepsi-55% (3708 units) Coca-Cola-45% ( 3034 units)

45%
55%

Cold Stock Pepsi Cold Stock Coca-Cola

Through FAQs 1-The market position of the Pepsi is very strong in area allotted to me near about 75%softdrinks sold belongs to Pepsi.
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2-Dew is the most selling brand in the area and at second position is mineral water. 3-The sale varies between 25000 to 50000 rupees daily on each route. There are three routes so total sales varies between 75000 to 150000 daily in the agency. 4-Retailers are not getting the benefits provided by the company because agency is more interested in selling to the whole sellers in bulk. 5-when there is any scheme launched by the company agency sells all the stock to the whole sellers for some benefit. 7-Whole sellers are selling at low price than Agency because of the stock they bought in schemes. 8-The work force is not well compensated their salary is very little(2500 Rs.) 9-Acceseries are provided to the big shops only and they should be on the main road.

1. Monthly inspection should be done to find out the problems of customers. 2. Schemes should be provided to the customers not to the whole sellers.
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3. Accessories should be provided on the basis of sale. 4. Check the selling of whole sellers at lower price than agency. 5. Agency should be more honest in providing benefits to retailers. 6. Salary of sales force should be increased so they may not do fraud with retailers to earn more.

1- An inspection officer should be recruited who perform surprise inspection of the market and find out the problems.

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2- Salary of the sales personals should be increased so they may not indulge in fraud to retailers.
3-

The vehicles of the agency should be inspected so the delivery should be maintained.

4- The supply from the factory to the agency should be good especially the brands like DEW.

My Project gives me the true knowledge of customer relationship concepts & also helped to understand the working environment of the Pepsico. The major thing, which I found in my whole project, is as follow:

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The market share of Pepsico is more than Coke The distribution channel of both company is very bad. Advertising policy of Pepsi is better than Coca Cola. Retailers are highly dissatisfied with salesmen behavior. Company relation with retailers is credit based. There are very less effort for promoting sales. There are no direct communication between retailers and company. There are no any route incharge. Retailers are not aware about company scheme and product development. Scheme is not distributed honestly among retailers.

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Bibliography

www.google.com www.Pepsicoindia.com www.Pepsico.com

Philip Kotler, Marketing Management, Twelfth


Edition.

Paul E. Green, Donald S. Tull and Gerald

Albaum- Research For Marketing Decision, G.C. Berry , Marketing Research

Questionnaire Design

s.n o 1 2

Sign board

Shop name

Adress

Ph. No.

pci

visi ccx

warm stock pci ccx

cold stock pci ccx

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3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34

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