PROJECT REPORT

On
“Distribution channel of Soft-drink”
(COKE)

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 CURRENT STATUS:
 India is one of the top five markets in turn of growth of soft
drink market.
 Over the past two years, the soft drink industry has seen a
value growth of 11% compound annual growth rate (CAGR)
and a volume growth of 5% CAGR. In total, 1.25 billion
people in the country drink 5.9 billion litres of soft drinks in a
year. This makes India’s per capita soft drinks consumption
large, but just 1/20th of that of the U.S., 1/10th of Kuwait,
1/8th of Thailand and Philippines, and one-third of
Malaysia’s.

OBJECTIVE:
To understand the distribution channels of Soft drink Company
in India.

 DISTRIBUTION CHANNEL:
Distribution is very important component of Logistics & Supply chain
management. Distribution in supply chain management refers to the distribution of a
good from one business to another. It can be factory to supplier, supplier to retailer, or
retailer to end customer. It is defined as a chain of intermediaries; each passing the
product down the chain to the next organization, before it finally reaches the consumer or
end-user. This process is known as the 'distribution chain' or the 'channel.' Each of the
elements in these chains will have their own specific needs, which the producer must take
into account, along with those of the all-important end-user.

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Channels

A number of alternate 'channels' of distribution may be available:

 Distributor, who sells to retailers,

 Retailer (also called dealer or reseller), who sells to end customers
 Advertisement typically used for consumption goods

Distribution channels may not be restricted to physical products from producer to

consumer in certain sectors, since both direct and indirect channels may be used. Hotels,
for example, may sell their services (typically rooms) directly or through travel agents,
tour operators, airlines, tourist boards, centralized reservation systems, etc. process of
transfer the products or services from Producer to Customer or end user.

There have also been some innovations in the distribution of services. For example, there
has been an increase in franchising and in rental services - the latter offering anything
from televisions through tools. There has also been some evidence of service integration,
with services linking together, particularly in the travel and tourism sectors. For example,
links now exist between airlines, hotels and car rental services. In addition, there has been
a significant increase in retail outlets for the service sector. Outlets such as estate
agencies and building society offices are crowding out traditional grocers from major
shopping areas.

Market factors
An important market factor is "buyer behavior"; how do buyers want to purchase the
product? Do they prefer to buy from retailers, locally, via mail order or perhaps over the
Internet? Another important factor is buyer needs for product information, installation
and servicing. Which channels are best served to provide the customer with the
information they need before buying? Does the product need specific technical assistance
either to install or service a product? Intermediaries are often best placed to provide
servicing rather than the original producer - for example in the case of motor cars.

The willingness of channel intermediaries to market product is also a factor. Retailers in

particular invest heavily in properties, shop fitting etc. They may decide not to support a

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particular product if it requires too much investment (e.g. training, display equipment,
warehousing).

Another important factor is intermediary cost. Intermediaries typically charge a"mark-

up" or "commission" for participating in the channel. This might be deemed
unacceptably high for the ultimate producer business.

Producer factors
A key question is whether the producer have the resources to perform the functions of the
channel? For example a producer may not have the resources to recruit, train and equip a
sales team. If so, the only option may be to use agents and/or other distributors.

Another factor is the extent to which producers want to maintain control over how, to
whom and at what price a product is sold. If a manufacturer sells via a retailer, they
effective lose control over the final consumer price, since the retailer sets the price and
any relevant discounts or promotional offers. Similarly, there is no guarantee for a
producer that their product/(s) are actually been stocked by the retailer. Direct distribution
gives a producer much more control over these issues.

SALES AND DISTRIBUTION NETWORK OF COCA-COLA INDIA.

COMPANY

FOBO
COBO

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 WAREHOUSE

C & F Agents
DISTRIBUTERS

SALESMAN SALESMAN

WHOLESALER

CUSTOMER

CUSTOMER

COBO: These are Company owned bottling operations operating directly under the
Company. Out of 32 bottling plants, Coca-Cola owns 15.

FOBO: These are Franchise owned bottling operations.

Warehouses: These are Company or franchisee owned warehouses spread over various
locations that cover the respective territories and come under the purview of their

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respective Area or Territory Offices. Stocks are sent from the bottling plants to these
warehouses, from where they are sent to the C & F centers and Distributor Points.

C & F Centers: These are the biggest centers in the distribution network and receive
proper assistance from the Company (either COBO or FOBO). The C & F center is
owned by a private player and not by the Company. The vehicles (Delivery Vans) are
owned by the Company, and the Salesmen at the C & F points are on the Company
Payroll.

Distributors: These are small, compared to C & F centers. Everything at the Distributor
point owned and managed by the distributor, even the salespersons are on the Distributors
payroll.

Wholesalers: These are smaller than C & F centers and Distributor points and get the
stock directly from the Company or Franchisee. They get their stock directly from the
Company and thus get special rates and extra discounts from the Company.

Retailer: Retailers are the most important chain in the distribution channel of Coca- Cola
as they are the only point of contact with the customers. Retailers get their stock from all
the other channel members in the distribution channel.

SALES AND MARKETING HIERARCHY OF Coca-cola INDIA.

MUM

UM UM
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 TDM MDM

ADC MDC

CE ME

SALES PERSON
MARKETING
ASSISTANT

MUM – Marketing Unit Manager:

In charge of specific zones (e.g. north, south, east, west) and report to the corporate
office.

UM - Unit Manager:
Incharge of day to day operations and supervision of all the functions within the
organizations including operations, logistics, sales and distribution, marketing. The Unit
Manager reports to the MUM.

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TDM - Territory Development Manager:
TDM is the in charge of the sales and distribution network of a particular territory within
a zone. Responsible for the daily, monthly and annual sales within the territory decides
the daily schemes for products and incentives for salespersons. He is also responsible for
cost effectiveness, profit generation and profit maximization within the territory.

MDM - Marketing Development Manager:

MDM is responsible for all the marketing activities and their effectiveness within a
territory. Decides the format and time frame of the marketing and promotional activities
and the incentives given to the retailers.

ADC - Area Development Coordinator:

Reports to the TDM, and is in charge of a C & F center and the distributor point in the
area. He is directly responsible for any issues in the area and is supposed to ensure the
smooth functioning of the entire sales and distribution network in the area. ADC is
responsible for timely disposal of any issue faced by the retailers. He decides and
approves the boards, displays and hoardings in the area.

MDC - Marketing Development Coordinator:

Reports to MDM, and is in charge of carrying out all the marketing activities in the area.
He is responsible for the execution and success of marketing and promotional activities.
Coordinates with the outside agencies for displays, boards, checks conducted in the
market. He is also responsible to keep a check on the expenditure of the marketing
activities in the market.

CE - Customer Executive:
Reports to the ADC and is in charge of the salespersons. He is required to visit the market
and accompany every salesperson as frequently as possible. He is the first person to get
information about the market / area and is the first contact if the salespersons or retailers

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face issue. Responsible for assigning and achieving daily sales target given to the
salespersons.

ME - Marketing Executive:
Reports to the MDC and is responsible for the daily functioning of the marketing
activities in the including awareness of promotions in the market and the response in the
market

Salesperson:
They are the most important asset for the company as they are the ones who sell the
products, are responsible for acquiring new customers, and retain the old ones. Their
work also includes informing the retailers about the promotions and any new scheme
launched. They are also required to push for the sale of any new product launched in the
market and make sure that the retailers are following the company guidelines regarding
the launch and the maintenance of V.C. coolers. They report to the CE.