CHAPTER - 1

INTRODUCTION

1.1 OBJECT OF THE PROJECT

The eight weeks Summer Training is very important for a student of MBA this type of study gives some practical knowledge to MBA students and practical knowledge is more useful than theoretical knowledge for any one. There is no certain formula for any particular problem but the aim of this study is to develop the ability of decision making. Right decision at right time itself helps an organization to run smoothly.

The training in any organization gives us an idea of different marketing activities and main emphasis is given on Promotional activities aspect and also it is seen how business is taken tactfully when any problem comes to an executive, the way of problem solving, right decision making and knowledge of different types of marketing activities gives much importance to this study. Though only in 60 days it was not possible to understand it so deeply but an over all ideas would be developed.

1.2 SELECTION OF THE TOPIC

Knowledge attains maturity and perfection through application in practical field. Application of Management Principles in all branches whether product, personnel, finance, marketing etc. results is more efficient and effective utilization of available resources. To achieve the purpose I have done my summer project training from Lumbini Beverages Pvt. Ltd. Hajipur unit. The topic given me is A B RIEF S TUDY D ISTRIBUTION
SYSTEM OF ON

P EPSI & C OCA -C OLA

IN

P ATNA .

This report has compiled firstly in partial fulfillment of the requirement for MBA, secondary to share the practical knowledge and experience gained as result of continued association with company is marketing branch. The detail mentioned in this report is based on real situations. Since the reader would like to know the general detail of two cola giants, therefore a chapter includes a discussion on theoretical aspects of comparative study and its application for the industry in marketing is also include. Further to help the reader in understanding the findings, graphical representation, conclusions and suggestions are also includes, which very much helps Lumbini Beverages Pvt. Ltd., Hajipur to know where he stands in the soft drinks market. what is the distribution system of Pepsi? What is the market share of Pepsi and what Pepsi is doing against Coca-Cola?

I frequently hope that this project report would be considerable help to the management for developing strategies in those areas.

1.3 OBJECTIVES OF THE STUDY

To study the distribution system of Pepsi and its competitors. To identify the factors which persuade the retailer for sale of Pepsi. To study the companys position in the soft drink market. To study the exclusive outlets of Pepsi and its competitors. To study the factors influencing distribution system of Pepsi. To study the promotional activities in Pepsi. To study the market share of Pepsi against its competitor. To identity, the organizational features of Pepsi .

1.4 RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research problem. When we talk about research methodology we not only talk about research but also consider the logic behind the methods we use in the context of our research study and explain why we are using a particular method or technique why we are not using other so that result are capable of being evaluated either by researcher himself or by others. Research methodology means the methods carried out to study the problem, analyzing it and represents the findings of the problem and give some suggestion regarding the problem. Steps in research methodology:

(1) Problem Definition The first step in any marketing research project is to define the problem. In defining the problem, the researcher should take into account the purpose of the study, the relevant background information, what information is needed, and how it will be used in decision making. Problem definition involves discussion with the decision makers, interviews with industry experts, analysis of secondary data, and, perhaps, some qualitative research, such as focus groups. Once the problem has been precisely defined, the research can be designed and conducted properly. (2) Development of an Approach to the Problem

Development of an approach to the problem includes formulating an objective or theoretical framework, analytical models, research questions, hypotheses, and identifying characteristics or factors that can influence the research design. This process is guided by discussions with management and industry experts, case studies and simulations, analysis of secondary data, qualitative research and pragmatic considerations.

(3) Research Design Formulation A research design is a framework or blueprint for conducting the marketing research project. It details the procedures necessary for obtaining the required information, and its purpose is to design a study that will test the hypotheses of interest, determine possible answers to the research questions, and provide the information needed for decision making. Conducting exploratory research, precisely defining the variables, and designing appropriate scales to measure them are also a part of the research design. The issue of how the data should be obtained from the respondents (for example, by conducting a survey or an experiment) must be addressed. It is also necessary to design a questionnaire and a sampling plan to select respondents for the study. More formally, formulating the research design involves the following steps: 1. Secondary data analysis 2. Qualitative research 3. Methods of collecting quantitative data (survey, observation, and experimentation) 4. Definition of the information needed 5. Measurement and scaling procedures 6. Questionnaire design 7. Sampling process and sample size 8. Plan of data analysis (4) Collection of data

Data collection involves a field force or staff that operates either in the field, as in the case of personal interviewing (in-home, mall intercept, or computer-assisted personal interviewing), from an office by telephone (telephone or computer-assisted telephone interviewing), or through mail (traditional mail and mail panel surveys with prerecruited households). Proper selection, training, supervision, and evaluation of the field force help minimize data-collection errors

. Data can be collected from two important sources Primary Data Secondary Data

Primary Data The data, which collected for the first time and afresh, is known as primary data. Primary data can be collected by various methods such as observations, Interviews, Schedules, and Questionnaires. Under this project the primary data collection method used is Questionnaire method. Secondary Data The data which have already been collected by someone else and which have already passed through the statistical process is known as secondary data. It can be collected through books, magazines, newspapers, and company publications, websites. (5) Data Preparation and Analysis Data preparation includes the editing, coding, transcription, and verification of data. Each questionnaire or observation form is inspected, or edited, and, if necessary, corrected. Number or letter codes are assigned to represent each response to each question in the questionnaire. The data from the questionnaires are transcribed or keypunched on to magnetic tape or disks or inputted directly into the computer. Verification ensures that the data from the original questionnaires have been accurately transcribed,

while data analysis, guided by the plan of data analysis, gives meaning to the data that have been collected. Univariate techniques are used for analyzing data when there is a single measurement of each element or unit in the sample, or, if there are several measurements of each element, each RCH variable is analyzed in isolation. On the other hand, multivariate techniques are used for analyzing data when there are two or more measurements on each element and the variables are analyzed simultaneously.

(6) Report Preparation and Presentation The entire project should be documented in a written report which addresses the specific research questions identified, describes the approach, the research design, data collection, and a data analysis procedure adopted, and presents the results and the major findings. The findings should be presented in a comprehensible format so that they can be readily used in the decision making process. In addition, an oral presentation should be made to management using tables, figures, and graphs to enhance clarity and impact. For these reasons, interviews with experts are more useful in conducting marketing research for industrial firms and for products of a technical nature, where it is relatively easy to identify and approach the experts. This method is also helpful in situations where little information is available from other sources, as in the case of radically new products.

DATA COLLECTION METHOD

Since the study is exploratory in nature. A personal interview with each retailer was aid of questionnaire was selected as the method of obtaining data the questionnaire to use in Patna to facilitate tabulation and analysis of data were designed for segment retailers.

Types of Research Types of Data Source Research Approaches Research Instruments Sampling Size Sample Size Sampling Unit Types of Universe Types of Questionnaire

Descriptive Primary & Secondary Observational & Survey Questionnaire Random Sampling 200 Customers in Patna city only All the prospective customer of Pepsi Structured

1.5 SCOPE OF THE STUDY

o The Market survey is conducted to make a comparative study of the problems endured by the retailers of the Pepsi Company. o The geographical scope of my survey was limited up to a part of Patna and its different market areas. o The survey covers a wide range of activities and the factors, that influences that shows the increase or decrease in the market share of the Company. o The survey is a sample of 200 retailers which was taken from different market areas. o To identify the market growth potential of the companys products through strengthen of the channel partners.

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1.6 LIMITATIONS OF THE STUDY

1. Since the product under study was a consumer goods which requires a large sample to have a correct study, a sample size of 200 Respondents was too small for it. However, time & money did not allow Researcher to have a large sample. In addition, to manage a large sample would be difficult by Researcher alone. 2. Duration of study also limited for further intensive study. 3. Mostly stress was given on primary data, as it was difficult to collect Secondary data from organization & distributors. 4. The sample selected is not purely random sample but it is convenient so that the result of the survey do not have any high degree if statistical significance. 5. The result of survey are based upon crucial assumption like(a) The respondents know right answer to the question put to them. (b) They are wiling to give the right answer. (c) Strictly based on the responses of the Retailers. (d) Difficult to ascertain the authenticity of their statement. 1. It is very difficult to influence and get right answer from old mentality Retailers. 2. Region i.e., Urban area therefore the result are applicable to Patna region only these findings may not have much relevance in other regions of different from rest of the country.

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3. All the conclusions, suggestions & recommendations will be made in the feed back obtained from survey based on responses given by the respondents.

1.7 RATIANALE OF THE PROJECT

UTILITY TO MYSELF

It will help me when I will go to work in the organization. Whatever experience I have will help me to deal with people. To work in any FMCG sector, this experience will give great exposure.

UTILITY FOR ORGANISATION

It will help the organization to know the actual condition of distribution system It can help the organization to establish strong distribution channel. It can promote the organizations to improve sales than competitors brand by using data that I have identified.

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CHAPTER 2

Company profile

13

2.1 HISTORY OF PEPSI

Pepsi-Cola born in the Carolinas in 1898 has a long and rich history. The drink is the invention of Caleb Bradham, a pharmacist and drugstore owner in New Bern, North Carolina. Pepsi-Cola is a carbonated beverage that is produced and manufactured by PepsiCo. It is sold in stores, restaurants and from vending machines. The drink was first made in the 1890s by pharmacist Caleb Bradham in New Bern, North Carolina. The brand was trademarked on June 16, 1903. The business began to grow, and on June 16, 1903, "Pepsi-Cola" was officially registered with the U.S. Patent Office. Donald M. Kendall, President and Chief Executive officer of Pepsi Cola and Herman W. Lay, Chairman and Chief Executive officer of FritoLay found in 1965 PepsiCo, Inc., through the merger of the two companies The Pepsi Cola Company began in 1898, but it only became known as PepsiCo when it merged with Frito Lay in 1965. Headquartered in Purchase, New York, with Research and Development Headquarters in Valhalla, New York. Mrs. Indra Nooyi became the chief executive of PepsiCo since 2006. PepsiCo Mission : "To be the world's premier consumer Products Company focused on convenience foods and beverages. We seek to produce healthy financial rewards to investors as we provide 14

opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity."

2.2 HISTORY OF PEPSI IN INDIA

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. Pepsi was banned from import in India in 1970 for having refused to release the list of its ingredients. in1988, the ban was lifted with Pepsi arriving on the market shortly afterwards. In 2003 and again in 2006, the Centre for Science and Environment (CSE), a nongovernmental organization in New Delhi, claimed that soda drinks produced by manufacturers in India, including both Pepsi and Coca-Cola, had dangerously 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, were banned in 2006 following partial bans on the drinks in schools, colleges and hospitals in five other Indian states. On September 22, 2006, the High Court in Kerala overturned the Kerala ban ruling that only the central government can ban food products

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2 .3 HISTORY OF LUMBINI BEVERAGES PVT. LTD .

With the urbanization of economy in 1991, about thirteen year after the exit of coca-cola from Indian seen, an MNC (Multi National Company) globally Known as PCI (Pepsi Cola International) entered the Indian market with its name, PFL (Pepsi Foods Ltd.) it started bottling its products in Bihar by Steel City Beverages, Jamshedpur on 24 March 1991. Late D. N. Kamani installed this very bottling unit in 1969. The company entered the soft drink with the introduction of Coca Cola and used to eater for the markets of Bihar, parts of Bengal, Orissa and Nepal, The Company was the pioneer of soft drink in Bihar. M/s Lumbini Beverages Pvt. Ltd. was established in the year of 1995. A person of Kolkata, Khilani brothers were responsible to set up this bottling plant of Hajipur Industrial Area, Vaishali having this motto to cope up whole North Bihars market and to satisfy the prospective consumers immediately. The function of organization just started in 1996 but the production went to produce in March 1998. It is one of those bottling units of PFL, which comes under FOBO (Franchise Owned Bottling Operation). This plant was installed with an initial investment of Rs.25 Crores. It started producing with its full capacity i.e. 600 bottles per minute and it will be the first plant in Bihar producing with such capacity.

16

It is operating with the help of distributors all over Bihar exclusively stocking Pepsi range of products. It sells its product through different distributor of PEPSI in Patna. Though this plant has just completed eleven years of establishment, yet in the very first season it has given its competitor very tough fights.

2.4 ORGANISATIONAL FLOWCHART AT WAREHOUSE

TDM: territory development manager ADC: area development coordinator C.E: customer executive

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RA: route agent PSR: salesman DA: delivery agent

2.5 PRODUCT RANGE The product range produced by Lumbini Beverages Ltd. is as under:Brand Pepsi Mirinda Mountain Dew 7up Slice Aquafina Flavors Cola orange lime Lime Clear lime Mango Purified water Size(ml) 200,300,600,1500,2000. 200,300,600,1500,2000. 200,300,600,1500,2000. 200,300,600,1500,2000. 200,300,600,1500,2000. 250,500. 500,1000,5000

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CHAPTER 3

DATA ANALYSIS AND INTERPRETATION

19

3.1 Topic under Study

Distribution Management System is specifically developed for the company; this has high volume of sales with wide distribution network. Distribution is one of the key marketing decisions in any market to understand the task of the intermediaries as that will help him or her plan, manage, and control market driven distribution function in the firm.

Distribution Alternative

Intensive Distribution

Selective Distribution

Exclusive Distribution

Intensive Distribution:-

This alternative involves all the possible outlets that can be

used to distribute the product. This is particularly useful in the products like soft drinks where distribution is a key success factor. Here, soft drink firms distribute their brands through multiple outlets to insure there easy availability to the customer. Any possible outlet where customer is expected to visit is also an outlet for the soft drink.

Selective Distribution: - This alternative is the middle path approach to distribution. In which the firm selects some outlets to distribute its products. This alternative helps focus the selling efforts of manufacturing firms on a few outlets rather than dissipating

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it over countless marginal ones. Selective distribution can help the manufacturer game optimum market coverage & more control but at a lesser cost than Intensive Distribution.

Exclusive Distribution:-

when the firm distribute its brand through just one or two

major outlets in the market who exclusively deal in it & not all competing brands, then we say it is using an exclusive distribution strategy. In case of soft drink exclusive outlet, it deals all available products in one outlet. This is a common form of distribution in products & brands that seek a high prestigious image. The firm also hopes to get the benefit of aggressive selling by such outlets.

Manufacturer
Dealer A Retailers Dealer B Dealer C Dealer D

Customers

Customers

Customers

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3.2 Data analysis and interpretation A. Types of Outlet:Sample size- 200

Types General Store Pan Shop Sweet Shop juice Shop Dhaba/Canteen Others

Numbers Of Outlet 34 22 30 62 46 6

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Types of Outlet

70 60 50 no. of 40 shop 30 20 10 0

General Pan shop Sweet store shop

Juice shop

canteen Others

type of shop

Source- Primary data

On the basis of the above graph, juice and canteen shop are the highest no of the retail / outlet of the Pepsi. It contains about 50% in the total types of the outlets. After that canteens or Dhaba are the second highest outlets of Pepsi and Coca-Cola i.e.23%.

B.

Market Share :
Sample size- 200

Sale Monthly Sale Of Pepsi Products Monthly Sale Of Coca-cola Products Total Sale

Approximate Quantity 10,586 15,587 26173

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Market share

Monthly sale of pepsi Products

Monthly sale of Coca-cola Products

\\\

40%

60%

Source- Primary data

The above chart indicate that the monthly sale of Coca-Cola products was better than the monthly sale of Pepsi products (approximately). Thats why Market share of CocaCola product is better than the Pepsi.

C. MARKERT SHARE AMONG PEPSI PRODUCT

PRODUCT Responses (%)

Pepsi 54

Mountain Dew 5

Mirinda 18

7UP 15

Others 8

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Market Share among Pepsi Product. 60 50 40 Market share in(%) 30 20 10 0 Pepsi Mountain Dew Mirinda Products 7UP Others

Source- Primary data

This graph shows that Pepsi has highest market share i.e. 54% than other Products such as Mountain Dew has 5%, Mirinda has 18%, and 7Up has 15% share in overall sell of the Pepsi.

D. EXCLUSIVE OUTLETS:

Sample size- 200

Outlet Exclusive Outlet Of Pepsi Exclusive Outlet Of Coca-cola Mixed (Pepsi & Coca-cola)

Number 17 29 154

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Exclusive Outlets
Pepsi Coca-cola Mixed

76%

15%

9%

Source- Primary data

The above graph indicates that the percentage of the mixed (Pepsi & Coca -Cola) outlets were extremely more than the separate Exclusive outlet of Pepsi and Exclusive outlet of Coca-Cola.

E. Supply of Pepsi and Coca - cola

Supply in Pepsi Respondents-200 Supply in days Response 1 35 3 97 5 37 7 31

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Demand & Supply

100 80
Responses

60 40 20 0 1 Days 3 Days 5 Days 7 Days

Supply in days

Source- Primary data

On the basis of collected information I analyze that supply of Pepsi from warehouse to retailer shop takes 3 to 5 days. This creates difficulties in the sale of Pepsi. And its competitors take less time than Pepsi i.e. 1 to3 days. So company should create new system of distribution to make it as an advantage.

Supply in Coca-cola Respondents-200

Supply in days Response

1 122

3 52

5 24

7 2

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Demand & Supply

150 100 Respondents 50 0 1 Days 3 Days 5 Days 7 Days

Supply in days

Source- Primary data

On the basis of collected information supply of coca-cola from warehouse to retailer has less time than Pepsi i.e. 1 day or may be 3 days. So it becomes a competitive advantage for coke in the consumer market.

F. Promotional activities that affect sales mostly

Schemes Responses

Free bottles 102

Prize 38

Discount/crates 45

Other 15

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Promotional activities that affect sales

Free bottles Prize Discount/crates Other

23% 19% 8%

50%

Source- Primary data

Above graph says that 50% retailer feels that free bottles scheme has great place in all promotional activity in promoting sales of Pepsi. After that 23% retailer feels that discount on the per crates has impact.

G. Distribution of Scheme

Proper Distribution Responses

Yes 137

No 63

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Proper disribution of Scheme

Yes No

32%

68%

Source- Primary data

The scheme which is provided by the company to promote the sell, 68% retailer feels that it is so effective. They are satisfied by the distribution system of scheme of the Pepsi. So that every small or big retailer has equal amount of the profit in these scheme.

H. Opinion about delivery of goods from Pepsi Warehouse

Type of opinion
Excellent Good Average

No. of retailers
46 94 45

30

Poor

15

Delivery of goods
Excellent Good Average Poor

8% 23%

23%

46%

On the basis of above graph I can say that delivery of Pepsi from warehouse to retailer is good i.e. 46% retailer feel delivery system is good in Pepsi and 23% feels excellent and average respectively.

I. Are you being provided the POINT OF PURCHASE (POP)/ POINT OF DISPLAY (POD) materials regularly?

Frequency
Always Sometimes

No. of retailers
52 108

Percentage of retailers
26% 54%

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Never

40

20%

About Pop materials

120 100 80 60 40 20 0 Always Sometimes Never

On the basis of collected primary data and after analyzing we can say that pop material i.e. point of purchase / point of display material is sometimes given by the company. About 54% retailer claims this that they are not getting Pop material regularly.

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CHAPTER 4

CONCLUSION

4. CONCLUSIONS
1. The majority of retailers deal in all the brand of Pepsi & Coke. 2. The study reveals that the market share of Pepsi in Patna is 40% as compared to Coca Cola is 60% thus Pepsi having a Clear edge over Coca Cola. 3. The study reveals the immediate steps are not taken in the replacement of damaged or breakage goods. The rival company Coca-Cola is very quick in this area. Moreover, efficient also.

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4. Number of route vehicles for delivery of goods is less than the required one for proper coverage of whole area of Patna. Thus just in time and efficient delivery is affected. 5. The demand of Coke exceeds the demand of Pepsi. 6. The Lumbini Beverages Pvt. Ltd. Pays attention in different marketing function also these are : a) Anticipating & recognition of demand b) Stimulation of demand. c) Satisfaction of demand. 7. Company at certain interval conducts market survey to evaluate demand trend. Consumption pattern & nature of growing competition in spite of the fact that soft drinks have already high & almost stable demand. Therefore, company undertakes different promotional schemes to enjoy them. I had confirmed my study to different specified direction. As for Lumbini Beverages Pvt. Ltd., It can be said that it does not have any major draw back in marketing activities still more efficient distribution by dealers & more effective sales executives & sales forces are required. However, the over all grip maintenance is satisfactory & company can retain market share & can upgrade it

Chapter - 5

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Suggestions and recommendations

5. SUGGESTIONS & RECOMMENDATIONS

Emphasis should be given to start few more exclusive Pepsi outlets. Delivery position should be maintained to get good returns from the market.

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 The Company must try to make different brands of Pepsi available at every retail outlets whether it is large or small, otherwise the consumers may go for substitute.

As most of the dealers have complaint that the salesperson does not tell them about schemes. For this before launching, any scheme company should advertise it by distributing Pamphlets to the dealers mentioning the Period of the scheme & time-to-time Proper check is required. No. of route vehicles for delivery of goods should be increased in number for proper catering in the entire area of Patna effectively & efficiently.

Sales people and delivery persons should properly monitor the outlets, whether the Point of Purchase/ Point of Display materials are available and are properly utilized or not. The companys Glow Sign boards (GSB) providing policy should be improved and it must be made clear to the retailers that on which basis GSBs are being provided to them.

In addition to the existing Display Materials being provided to the retailers, the company can also provide them some more different display materials irrespective of the categories that the retailers fall into. Point of purchase/ Point of Display materials, merchandising items should be provided to the retailers on more regular basis to increase the sales volume.
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 Maintenance work of the visi-cooler must be improved as it would save the Company and the retailers from a lot of hassles. The Company should take steps to replace damaged or leaked products frequently from the retailers. At every petrol pumps, schools, colleges and parks, the Company should try to put up its outlet and can also install fountain machines. This will help in generating impulse purchase. The company executives should visit the outlets on a regular basis. The Pepsi products are doing well in the market; despite this the retailers want more profit margins. We must try to give them a reasonable profit margin.

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APPENDICES

QUESTIONNAIRE

Questionnaire
Name of the shop/outlet: .................................................................. Address/Location Type of outlet (a) General Store (c) Sweet Shop (e) Dhaba /Canteen : ....................................................................... : .............................................................. (b) Pan Shop (d) Lassi /Juice Shop (f) Others

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l .Q. Which brand of soft drinks you deal in? (a) Pepsi (c) Both (b) Coca-cola (d) Other

2. Q. Which brand of cola provides you better facility? (a) Pepsi (b)Coca-cola (c) Both

3. Q. How many crates of Pepsi & Coca-Cola you sell/day? (a) 0-1 crates (c) 2-3 crates (b) 1-2 crates (d) 3 & above

4. Q. Which companys signage you have in your outlet? (a) Pepsi (c) Both (b) Coca-Cola (d) No signage

5. Q. Which companys visi - cooler you have in your outlet? (a) Pepsi (d) Own (b) Coca-Cola (e) Mixed (c) both

6. Q. Which medium affects the sales most? (a) Television (c) Display (b) Magazines/Newspapers (d) Wall paintings/Hoardings

7. Q. Do you think that aggressive advertising further increase the sales volume of Pepsi? 39

(a) Yes

(b) No

8. Q. What promotional activities affect sale mostly. (a) Free bottle scheme (c) Discount Crates
zz

(b) Prize (d) Other

9. Q. Your recommendation for further sales mostly? ...................................................................................

10. Q. Any suggestion for betterment of Pepsi?

GLOSSARY GLOSSARY GLOSSARY GLOSSARY

PET Plastic Bottles

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Signage Hoarding, Sign board, Painting Visi-coolers Refrigerators specially provided by company

BIBILIOGRAPHY BIBILIOGRAPHY BIBILIOG BIBILIOG

RAPHY RAPHY
Marketing Management, the Millennium Edition : Philip Kotler

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 Research Methodology Marketing Research Published Materials

: C.R. Kothari : G.C. Berry : Economics Times Business World

www.Pepsico.Com

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