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ON

(IN KANPUR)

OF

FOR

HINDUSTAN COCA-COLA BEVERAGES PVT.LTD.,


PANKI INDUSTRIAL AREA, DADA NAGAR KANPUR.

SUBMITTED IN SUMMER TRAINING OF M.B.A. PROGRAMME OF


LOVELY PROFESSIONAL UNIVERSITY
PHAGWARA, PUNJAB.

-: UNDER GUIDANCE OF :-
MR. MANISH PUNDEER
MOHD. FAISAL

SUBMITTED BY:
SHYAMAL MISHRA
M.B.A. III SEMESTER
2009-2011

LOVELY PROFESSIONAL UNIVERSITY,


JALANDHAR
PUNJAB

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ACKNOWLEDGEMENT

I would like to express my heartiest gratitude to Mr. Deepak Rewari


(General Manager) Mr. Manish Pundeer (Area Capability &
Development Manager) Hindustan Coca Cola Beverages Private Limited.
Panki Industrial Area, Kanpur for giving opportunity to associate myself
to the world’s largest soft drink company and to carry out my project
titled “Right Execution Daily & Horizontal Expansion”.

I am sincerely thankful to Mr. Mohd. Faisal (SALES


TRAINER) under whose guidance I have successfully completed this
project and the time spend with him has been a great learning experience.
Due to his constant encouragement, warm response and guidance for
filling every gap with valuable ideas that has made this project successful.

I would also give special thanks to all the owner of the out lets for giving
me the precious time to discuss all their problems. I would also like to give
my sincere thanks to all the staff and the members of Hindustan Coca-
Cola Beverages Private Limited.

(Manish Pundir)
SHYAMAL MISHRA
(A.C.D.M.) M.B.A. III SEMESTER
2009-2011

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CERTIFICATE-
This is to certify that Mr. Nitin Mishra has satisfactorily completed the project
work entitled "Consumer Buying Behavior Regarding houseware products" at
Hamilton Houseware private Limited, under the guidance based on the declaration
made by the candidate and my association as guide for carrying out this work, I
recommend this project report for evaluation as a partial requirement of the MBA
Program of lovely professional university, Punjab.

DATE: MR. SANJAY JINDAL


(PROJECT GUIDE)

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MEANING OF PROJECT

The word “Project” has great specification in the field of management before
starting any work we must have an idea about its basic. The meaning of the
“PROJECT” is as follows: -

“P” – The word ‘p’ signify the phenomenon of planning, which deals
symbolization and proper arrangement of sensex and suggestion on
respectively in accordance with need.

“R” – It stand for associated with word resource with which guides to promote
planning.

“O” – This letter stands overhead expenses on unestimated expenses, which


occur in manufactures designed or layout of project.

“J” – This letter stands for joint efforts i.e. Project work which is undertaking
should be completed with a combined effort.

“E” – This stands for engineering i.e. worker undertaken is to be employing


technical process.

“C” – This stands for the phenomenon of constriction on which is more


essentially and basic form of work.

“T” – This stands for the techniques unless techniques to work is not Known.

CONCLUSION: - In general we came to conclusion. That project is


systematic conclusion discussed proposed particular subject which, include
complete information about required to machine tools, appliances need the
various operation required to be done in well sequences.

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CHAPTER TITLE PAGE NO.

I INTRODUCTION – PURPOSE 6-55

II REVIEW OG LITERATURE 56-61

III R.E.D. CONCEPT 62-65

IV HORIZONTAL EXPANSION 66-69

V RESEARCH METHODOLOGY 70-72

VI DATA ANALYSIS 73-78

VII CONCLUSION 79

VIII FINDINGS 80

IX SUGGESTIONS 81

X QUESTIONNAIRE 82

XI REFERENCES 83

XII R.E.D. SCORING SHEET 84-85

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INTRODUCTION

“Coke would rather be long


term wiser, than being short term smarter”

Abraham Ninan
Director External Affairs,
Coca-Cola, India

COCA COLA ENTERPRISES INC.

TYPE : PUBLIC (NYSE:CCE)

FOUNDED : 1926

HEAD QUARTERS : ATLANTA, GEORGIA, U.S.A.

CHIEF EXECUTIVE OFFICER : JOHN BROCK

CHIEF FINANCIAL OFFICER : WILLIAM W.DOUGLAS

INDUSTRY : BEVERAGES

REVENUE : $19.800 BILLION USD

OPERATING INCOME : $1.495 BILLION USD

NET INCOME : $1.143 BILLION USD

EMPLOYEES : 73,000 (APPROX)

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HISTORY OF COCA-COLA

This story begins in Atlanta, Georgia on May 8, 1886, when a pharmacist


called Dr. John Smith Pemberton first mixed Coca-Cola in his back yard. This
formula, which was made from carbonated water, cane sugar syrup, caffeine,
extracts of kola nuts and cola leaves, was brought to the nearby Jacobs’
Pharmacy where it made its Debut as a soft drink the same day, selling for
only 5 cent. His bookkeeper named this drink “Coca-Cola” after the first two
ingredients and the same distinctive script he wrote it in is the same logo they
use
To this day.

In January 1893 Coca-Cola was registered with the U.S. patent office.
Later on in 1915 the Root glass company created the famous contour glass
bottle for Coca-Cola in 1915.

In 1917 Coca-Cola was found to be the world’s most recognized


trademark with a record of 3 million Coke’s sold per day. Unfortunately, John
Pemberton fell ill, and did not live to see his product’s success.

Sadly, in the first year of Coke’s existence, Pemberton and his partner
only made $50. Pemberton sold two third of his business in 1888 to cover his
losses and keep the business afloat.

He died later that year, and Mr. Candler, an Atlanta druggist,


purchased total interest in Coca-Cola for an unbelievable $2,300 in 1891. In
1891,Candler and his brother formed the Coca-Cola Company.

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EARLY GROWTH

In 1893 Candler registered Coca-Cola as a patented trademark. He also


responded to growing concern over the dangers of cocaine by reducing the
amount of coca in the drink to a trace. However, he kept some coca extract in
Coca-Cola so the name would accurately describe the drink. Candler only had
a patent on the name, and not the drink syrup that is, the drink’s base,
containing all the ingredients minus carbonated water. He figured that keeping
the Coca in his formula would legally allow the company to distinguish its
drink from imitations. Other companies also produced soda drink made with
cola nut extract. In particular, the Pepsi-Cola Company would become Coca-
Cola Company’s major competitor over the next few decades.
Candler also spent more than $11,000 on his first massive advertising
campaign in 1892. The Coca-Cola logo appeared across the country painted as
a mural on walls; displayed on posters and soda such as calendars and
drinking glasses. In addition, Candler was the first person ever to use coupons
to gain customers for a product. He distributed flyers offering free soda
fountain glasses of Coca-Cola to people visiting his drugstore.
In 1894 the Coca-Cola Company opened its first Coke syrup
production plant outside of Atlanta, in Dallas, Texas. That same year a candy
storeowner in Vicksburg, Mississippi, installed bottling machines and
produced the first bottled Coke. It had previously been sold only at soda
fountains. By 1895 the drink was sold in all U.S. states and territories.
In 1899 lawyers Benjamin Thomas and Joseph Whitehead of
Chattanooga, Tennessee, bought the exclusive right to distribute Coke syrup to
bottles throughout most of the country for only on dollars, at the time, Candler
saw little profit in bottling and was more than willing to give up that part of
the business.
In 1915 the Root Glass Company created a couture glass bottle for
Coke, its design based on the curvature of a coca bean. This bottle design
became a Coke trademark worldwide. The same year, Candler retired from the

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company, passing it on to his children and moving into polities. He was
elected mayor of Atlanta in 1916.
In 1919 the Candler family sold Coca-Cola to businessman Ernest
Woodruff of Columbus, Georgia, for $25 million. Woodruff son, Robert, was
elected company president in 1923. Robert Woodruff was a skilled marketer,
and he put more of the company’s resources into market research than
manufacturing Coke.

WARTIME DEVELOPMENT

During World War II (1939-1945), Woodruff also boosted


Coke’spopuler image in the United States by pledging that his company would
provide Coke to every U.S. soldier. The company did not limit itself, however,
to only doing business that would increase its success in America. In the
period leading up to the war, between 1930 and 1936, it had set up a division
of the company in Germany, and it continued that venture during the war. It
recreated its image as a German company and allowed the Germans to
produce all but two, secret, Coca-Cola ingredients in their own factories.
In 1941 the German company’s president, Max Keith, developed Fanta
orange soda using orange flavoring and all the German-made Coke
ingredients. The Coca-Cola Company’s wartime efforts helped it expend its
global market, often with the economic support of the U.S. government.
By the end of the war in 1945, it had established 64 overseas bottling
plants. The same year the company registered a patent on Coca-Cola’s popular
nickname, COKE.

POSTWAR GROWTH

In 1955 Robert Woodruff retired as the Coca-Cola Company’s


president. Candler and Woodruff are remembered as the two most important
figures in the company’s early growth, both for their contributions to the
company and their considerable fortunes donated to the city of Atlanta. After

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Woodruff departure, the company began to diversify by producing new
products, acquiring new business, and entering new international markets.
In 1960 the Coca-Cola Company purchased the Minute Maid Corp.
producer of fruit juices and began offering Coke in cans. Between 1960 and
1963 it also launched four new soft drink in the United States: Fanta, an
orange soda; Sprite, a lemon-lime soda; Diet Cola; Diet grapefruit-flavored
soda. In 1964 the company acquired the Duncan foods crop. In 1967, it created
the Coca-Cola foods division by merging its Duncan and Minute Maid
operations.
In the late 1960s, Coca-Cola faced difficulties in some of its foreign
markets. When the company built a bottling plant in Israel at the outset of the
Arab-Israel War, the governments of all Arab League nations banned the
production and sale of Coke. A year later the company withdrew from its
markets in India when that country’s government requested that Coca-Cola
reduces its equity in joint ventures to 40 percent. The company refused to
relinquish so much control over those operations.
In 1977 Coca-Cola began packaging Coke and other drinks in two-liter
plastic bottles. The popularity of these large bottles grew over time, and their
sales earned the company new project, primarily in small specialty and
convenience stores.
In 1982 the company introduced Diet Coke, which soon becomes the
best-selling diet soft drink in the world.

Also in 1982, Coca-Cola purchased the motion-picture company,


Columbia Picture Industries, also know as Tri-star Pictures, for almost $700
million. Two year later, the company sold off its Columbia holdings and other
media acquisitions to Sony Corporation for over $1.5 billion.

By 1984 Pepsi-Cola had gained on Coke’s previous domination of the


U.S. market to the point that the two had almost equal sales. In an attempt to
return market dominance, the company attempted the first-ever reason of the
original Coke recipe. The American public largely rejected New Coke, and so
the company quickly returned to also producing the old recipe under the name
Coca-Cola classic.

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RECENT DEVELOPMENTS

In 1986 The COCA-Cola Company consolidated all of its no


franchised U.S. bottling operating as Coca-Cola Enterprise, Inc. The new
company began acquiring independent bottling companies, a venture that grew
into the world’s largest bottle of soft drinks by 1988, while Coca-Cola
Enterprise distributes over half of all Coca-Cola products in the United States,
small franchises businesses continue to bottle can and distribute the
company’s drink worldwide.

In 1987 The Coca-Cola Company was fisted in the prestigious Dow


Jones Industrial Averages index of stock market performance. Its stock is
traded on the New York Stock Exchange. Coca –Cola and Pepsi Company
products occupied nine of the top ten spots in the U.S. soft drink market in
themed-1990s.

Worldwide, Coca-Cola ranked first in soft drink sales, and the


company earned almost 80 percent of its profits from international sales.

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SOFT DRINK INDUSTRY IN INDIA

The Indian Soft-Drink Industry is a 3500 crore rupee Industry


comprised of consumer’s throughout the country, and of all ages. The industry
has been comprised of all Indian Soft-Drinks manufactures and the
multinational Coca-Cola up to 1976.

From 1976 to 1989, the industry only comprised of Indian


manufacturers namely, Parle, Campa-Cola and Dukes. Decades of 90’s have
brought changes in Government Policies of liberalization, which has helped
user in two huge American Multinational Pepsi-Cola international and Coca-
Cola.

THE CHRONOLOGY OF SOFT-DRINK SCENARIO


IN INDIA
1977
 Refusing to dilute its equity stake, Coca-Cola winds
up it operations in the country.

 Thums-Up from Parle and Campa-Cola from Pure


Drinks launched.
1986
 An application for a soft drink cum snack food joint
venture by Pepsi. Voltas and Punjab agro is submitted to the Indian
Government.
1988
 Final approval for the Pepsi food limited project
granted by the Cabinet committee on economic affairs of the Rajeev Gandhi
Government.

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 Coca-Cola South Asia Holding Incorporation of the
U.S. files an application to manufacture soft drinks concentrate in Noida
(Delhi) free trade zone.

1990
 Pepsi Cola and 7 Up launched in limited market in
North Indian.

 The Government clears the Pepsi Project again but


with the brand name changed to Lehar Pepsi. Simultaneously, it also rejects
the application of Coke. Citra hits the market from the Parle Stable.
1991
 Britco food files an application before FIPB to set
up a new 50 crore facility in Maharashtra.

 Pepsi extends its soft drink reach on national scale.


Products launched in Delhi and Bombay.

 Britco foods application cleared by the FIPB, Pepsi


and start initial negotiations for a strategic alliance but talks break of after a
while.
1993
 Pepsi launches Teem and Slice to counter Limca
and Maaza respectively from Parle. Pepsi captures about 30% market share in
about two years.

 Coke files an application for a 100% owned soft


drinks company with FIPB, Decides to part ways with Rajan Pillai. The
Government clears the Coke application in record time.

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 Voltas pulls out of the Pepsi Food Limited joint
venture. Pepsi decides to buyout the Voltas share and raises its equity to 92%
Report of Coke Parle joint gain strength.

 Pepsi launched 1 liter bottles in Pepsi-Cola,


Mirinda and Teem flavors. Sweeps off the 100ml segment over Pure Drinks.

 Coca-Cola buys out Parle and major leaders of the


market, Ramesh Chauhan, becomes a part of the Coke game plan.

 Fountain Pepsi launched in the Northern part of


India.

 Coca-Cola hits the Indian in 300 ml at the price of


250 ml. Equity 100% for Coca-Cola.

 Pepsi jump up in to Mineral Water name Aquafina.


2000
 Coca-Cola Indian has registered a growth of 18th
percent in its net sale during the first quarter of the current fiscal year.

 Hrithik the burning sensation of Bollywood is hired


to advertise Coke is very effective.
2001
 Coca-Cola upgraded from 1.5 ltr. To 2 ltr.

 Coke hired Ashwaria, Amir Khan and Hrithik for


effective advertising.

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COCA-COLA IN INDIA

The Coca-Cola Company entered India in the early 1950s. It set up


four bottling plants at Bombay, Calcutta, Kanpur and Delhi.

In 1950 as there were negligible companies in Indian market therefore


Coca-Cola did not face much competition and they were accepted in Indian
market more easily. By the end of 1977 Coca-Cola had captured more than
45% of market share in India. Then Coca-Cola left India following public
disputes over share holding structure and import permit. As per FERA
REGULATION the company was required to India close operation by May 5,
1978 yet strongly enough the company’s operation come to end in July 1977.

In October 1993, Coca-Cola returned to India after 16 years of absence


with the slogan “Old waves have come to India again” first launched in
HATHRAS near AGRA HOME of the famous TAJ MAHAL.

At this time Parle was the leader in soft drink market and had more
than 60% of the total market share in soft drink Coca-Cola joined hand with
Parle and strategic alliance with Parle export give the company instant
ownership of the nation top soft drinks brands Thums-Up, Limca, Citra, Gold
Spot and Maaza access to Parle’s extensive 62 plant bottling network and a
base for the rapid introduction of the company’s international brand by
striking a $40 million deal with Parle Coke almost a clear sweep and made it
goal as “To become an all occasion drink not a special treat beverage”.

VISION OF COCA-COLA IN INDIA

Provide exceptional strategic leadership in the Coca-Cola India System


resulting in consumer and customer preference and loyalty through Coca-
Cola’s commitment to them, and in a highly profitable Coca-Cola corporate
branded beverage system.

MISSION OF THE COCA-COLA IN INDIA

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Create consumer products, services and communications customer’s
service and bottling system strategy processes and tools in order to create
competitive advantage and deliver superior value to:

 Consum
ers as a superior beverage experience.
 Consum
ers as an opportunity to grow profits through the use of
finished drinks.
 Bottlers
as an opportunity to make reasonable to grow profits
and volume.
 TCCC
as trademark enhancement and positive economic value
added.
 Supplier
s as an opportunity to make reasonable profits when
creating real value added in an environment of system
wide teamwork, flexible business system and
continuous improvement.
 CCI
associates as superior career opportunity.
 Indian
society in the form of a contribution to economic and
social development.

PRODUCT PROFILE OF COCA-COLA

There are nine brands of coca-cola in India and they are differ in taste,
flavor and also in their colours.

1. COKE

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Coke is considered to be a cola drink. It is generally preferred by all
sections of consumer. This is a case cow brand for the company in terms of
sales revenue.

2. THUMS-UP

Thums-up is also considered to be a cola drink. It is hard in


comparison to coke. It is preferred by all section of consumers but especially
to teen-agers. It is a big source of company to cash its publicity.

3. LIMCA

Limca is considered to be lemony in taste, and comes under the


category of cloudy lemon because of its colour, which is similar to that of
clouds. It has to yield good sales revenue. It is generally preferred by Children
& Women.

4. FANTA

FANTA ORNAGE, It is orange flavor & preferred by Children &


Women.

5. MAAZA

MAAZA MANGO, in maaza cold drink no gas only based on juice. It


is a non-aerated soft drink. It is preferred mostly Children & Women.

6. KINLEY SODA

This is a soda drink. It has no colour and no flavor. It is generally used


with alcohol and used by adults.

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7. SPRITE

Sprite is a good product at cola and contains at lemon flavor.

8. KINLEY WATER

Kinley water is a fresh and mineral water and market competitor of


Bisleri and Aquafina.

9. MINUTE MAID

In Minute maid pupply orange cold drink no gas only based on orange
juice. It is a non-aerated soft drink and market competitor of Tropicana
Twister.

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SWOT ANALYSIS

STRENGTHS

1. Improved quality control.


2. Latest technology.
3. Heavy investment in both infrastructure and sales promotion
campaigns.
4. Modified and attractive packaging.
5. Strong advertising network.

WEAKNESS

1. Entire infrastructure needs a face-lift.

2. Unskilled labour.

3. Tight case policy.

4. Fear of retrenchment among the workers.

OPPORTUNITIES

1. Wide market.
2. Good rural market.
3. Direct distribution.

THREATS

1. Stiff competition.

2. Illegal distribution done by some distributors.

3. Changing of consumer preference.

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CONSUMER CHOICE AT A GLANCE

Coca-Cola Mainly preferred by the Youngster & Kids.

Thums-Up Youngster.

Limca Common Drink.

Fanta Basically Preferred by Ladies and Kids.

Maaza Also Ladies and Kids.

Sprite Not clearly defines.

Kinley Soda Mostly those who consume liquor.

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INGREDIENT DELIVERY

Sweetener

Team of professionals, work on selecting, auditing, sampling, testing,


approving and then authorizing the sugar suppliers and the list of such
authorized suppliers with approved sugar lots and along with the certificate of
analysis are sent across to all the bottling unit for procurement.

Secret Formula

Created in special concentrate plants, it's delivered, held and used under strict
controls to maintain its integrity and security. Each unit of concentrate is
especially identifiable to allow the "history" of each component to be
researched at any stage of production, storage or use.

CO2 Formula

when delivered to the plant, carbon dioxide, or CO2, comes in cylinders for
easy delivery and storage. But what is it? In essence, it's a colorless and
odorless gas that provides the "fizz" for our beverages. But it's also a by-
product of our breathing and used by plants and trees to produce oxygen.

Water

since water is a key component to all our beverages, its quality is critical. And,
since public water quality varies around the world, each plant further treats the
water it uses. This means that before water is added to any of our beverages;

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it's rigorously filtered and cleansed. We then continuously sample the water to
ensure it meet our standards.
Materials

Ingredients are not the only things delivered to the plant. Other materials such
as bottles, cans, labels and packaging are also delivered. Our plants in India
use refillable bottles, CANS, PET etc. in the Production Process, when bottles
and cans are delivered to the plant; they are carefully inspected to ensure that
they meet our exacting standards. Once these have passed initial inspection.

WASHING AND RINSING

To ensure quality, each bottle is washed, sanitized and rinsed before being
filled. While this sounds simple, the actual steps can differ by bottling plant. In
India, our plants use refillable glass, cans or PET bottles. To ensure they meet
our cleanliness standard, bottles are first hit with prerinse jets which remove
any dirt or debris. They are then soaked in a high-temperature deep cleaning
solution that removes any remaining dirt and sanitizes them. The bottles then
move to the "hydrowash" where they are washed again with a deep cleaning
pressure-spray. They move on to be washed and/or rinsed.

MIXING AND BLENDING

H2O and Sugar

Mixing and blending begin with the steps of mixing pure water with refined
sugar, which creates simple syrup. The syrup is then measured for the correct
amount of sugar.

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Secret Formula

Our secret formula is... still secret! That's right; the secret formula remains a
mystery to the millions of people in nearly 200 countries that enjoys our
refreshing beverages everyday. Even though we can't tell you the secret, you
can be sure that "LIFE TASTES GOOD" with Coca-Cola.

H20 and Syrup

With the syrup nearing its final state, we mix it with pure water, creating the
finished uncarbonated beverage. However, the water and syrup must be mixed
in right ratio. This is done by the beverage proportioning equipment. It
accurately measures the correct ratio for each and sends this mixture to the
carbonator.

CO2 Adding

Adding CO2 or carbon dioxide gas is the final touch that carbonates the
beverages. Carbon dioxide not only gives our beverages their effervescent
zest, but it also adds to the distinctive and familiar taste everyone has come to
expect from our beverages.

FILLING

Once all the ingredients have been mixed and blended and the bottles have
been cleaned and sanitized, we're ready to start filling. This is a surprisingly
complex process requiring precision at each step. To begin with, bottles must
be carefully timed as they move to the filler - synchronization is key. Once at
the filler, bottles are either held securely in place by flexible grippers or
precisely placed under filling valves by centering devices. Before the bottles
can be filled, the inside of the bottles must be pressurized. This allows for the

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force of gravity itself to draw the beverage into the bottle - a process that
ensures the smooth flow of liquid, with little to no foaming.

CAPPING

Once filled, bottles are then capped. We use different caps for different bottles
- glass bottles are usually topped with a metal crown while "PET BOTTLES"
are topped with a plastic screw-top. Each cap type then moves through
different parts of the machine, which ensures each cap stays scratch free and is
in the right position to be precisely placed on the bottle. As quality and
freshness are key, we use a "no closure" detector during the capping process
and a "go-no-go gauge" or "torque meter" after the bottles has been capped.
The "no-closure"

detector checks if a screw top or crowns has been placed on bottle. The
process actually stops if the detector doesn't find a closure. The "go-no-go
gauge" checks for the proper crown crimp and the "torque meter" checks to
make sure the screw-top is good and tight. If the bottle cap isn't just right, the
beverages can become flat or be affected in other ways. If this happens, the
bottle is discarded.

LABELING

Once the bottles have been filled and capped, they move on to be labeled. A
special machine dispenses labels from large rollers, cuts them and place on the
bottles. For special labels such as commemorative bottles for football
championships, the labels are sent to the bottling plants for approval, and then
used for packaging. Depending on the occasion, some of these special bottles
will go only to the specific locations. For example, a national football
championship bottle will be sent only to the hometown or state of the
championship team.

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CODING

The bottle is now ready to be coded. Each one of our beverages is marked with
a special code that identifies specific information about it. The codes simply
identify the date the beverages was bottled or canned. These codes identify the
date, time, batch no. And the MRP. Product coding allows us to ensure that u
receive our beverages at their flavorful best

INSPECTION

We inspect bottles at many points during the process. With refillable bottles, it
happens they are first brought into the plant. They are also inspected after they
are washed and again after they are filled. Inspectors look for external bottle
imperfections and make sure each bottle has the right amount of beverages.
Even after filling, each plant samples bottles for analysis in its lab to ensure
quality is up to standards.

PACKAGING

Once our filled beverages have passed final inspection, they are ready to be
packaged for delivery. Generally, packing can refer to everything from the
unique "BOTTLE" and "CAN" designs, to label designs, to cardboard boxes
and containers, to plastic rings. Because the needs and tastes of our consumers
are so diverse, the packaging varies depending on where the beverages are
being sent.

WAREHOUSING & DELIVERY

In order to make sure the freshest beverages possible get to you, each
warehouse must efficiently manage the thousands of beverages cases produced

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each day. Beverage organization is key, though it's the bottle and can coding
that allow for the necessary precision. From the warehouse, we load beverages
onto our distinctive trucks. Night and day, our trucks are delivering our
refreshing beverages to stores, soda fountains, and vending machines near
you.

Pesticide use

In 2003, the Centre for Science and Environment (CSE), a non-governmental


organisations in New Delhi, said aerated waters produced by soft drinks
manufacturers in India, including multinational giants Pepsico and Coca-Cola,
contained toxins including lindane, DDT, malathion and chlorpyrifos—
pesticides that can contribute to cancer and a breakdown of the immune
system. Tested products included Coke, Pepsi, and several other soft drinks
(7Up, Mirinda, Fanta, Thums Up, Limca, Sprite), many produced by The
Coca-Cola Company. 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. Coca-Cola and PepsiCo
angrily denied allegations that their products manufactured in India contained
toxin levels far above the norms permitted in the developed world. David Cox,
Coke's Hong Kong-based communications director for Asia, accused Sunita
Narain, CSE's director, of

"brandjacking" — using Coke's brand name to draw attention to her campaign


against pesticides. Narain defended CSE's actions by describing them as a
natural follow-up to a previous study it did on bottled water.
In 2004, an Indian parliamentary committee backed up CSE's findings,
and a government-appointed committee was tasked with developing the
world's first pesticide standards for soft drinks. Coke and PepsiCo oppose the
move, arguing that lab tests aren't reliable enough to detect minute traces of
pesticides in complex drinks like soda.

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The Coca-Cola Company has responded that its plants filter water to
remove potential contaminants and that its products are tested for pesticides
and must meet minimum health standards before they are distributed.

Coca-Cola had registered a 15 percent drop in sales after the pesticide


allegations were made in 2003.
As of 2005, Coke and Pepsi together hold 95% market share of soft-drink
sales in India.
In 2006, the Indian state of Kerala banned the sale and production of
Coca-Cola, along with other soft drinks, due to concerns of high levels of
pesticide residue On Friday, September 22, 2006, the High Court in Kerala
overturned the Kerala ban ruling that only the federal government can ban
food products.

Water use

Environmental degradation in the form of depletion of the local ground


water table due to the utilization of natural water resources by the company
poses a serious threat to many communities.
In March 2004, local officials in Kerala shut down a $16 million Coke
bottling plant blamed for a drastic decline in both quantity and quality of water
available to local farmers and villagers.
In April 2005, Kerala's highest court rejected water use claims, noting
that wells there continued to dry up last summer, months after the local Coke
plant stopped operating. Further, a scientific study requested by the court
found that while the plant had "aggravated the water scarcity situation," the
"most significant factor" was a lack of rainfall . Critics respond that Coke
shouldn't be locating bottling plants in drought-stricken areas.
The company has been trying to regain the plant's license, fighting a
case that has gone all the way to India's Supreme Court.
Meanwhile, near the holy city of Varanasi in northeastern India, a local
water official blames a Coke plant — which has been the scene of many
protests by NGOs and local residents — for polluting groundwater by

32
releasing wastewater into surrounding land. A Coke official confirms there
had been a drainage problem with treated wastewater several years ago but
says the company built a long pipeline to correct it.
Indian environmental activists Vandana Shiva has stated that it takes
nine litres of clean water to manufacture a litre of Coke though Coca-Cola
says it is only an average of 3.12 litres.

Packaging

Packaging used in Coca-Cola's products has a significant environmental


impact but the company strongly opposes attempts to introduce mechanisms
such as container deposit legislation.

Criticisms in context of India's past

These controversies are a reminder of "India's sometimes acrimonious


relationship with huge multinational companies." Indeed, some argue that
Coke and Pepsi have "been major targets in part because they are well-known
foreign companies that draw plenty of attention."
Coca-Cola was India's leading soft drink until 1977 when it left India
after a new government ordered the company to turn over its secret formula
for Coca-Cola and dilute its stake in its Indian unit as required by the Foreign
Exchange Regulation Act (FERA). In 1993, the company (along with
PepsiCo) returned in pursuance of India's Liberalization policy.

33
DIFFERENT PLAYERS IN THE SOFT DRINKS MARKET

PEPSI

Caleb Brandhum, a North Caroline Pharmacist, structure Pepsi Cola in


the 1890’s as cure of dyspepsia (indigestion). In 1902, Bradhum applied for a
trade mark, issued ninety seven share of stock and began selling Pepsi syrup in
earnest. In his first year of business he spend $1900 on advertising a huge sum
that he sold only 8000 gallons of syrup. In 1905 Bradhum built Pepsi’s
bottling plant. By 1907 he was selling 10,000 gallons a year, two years later,
he hired a New York advertising agency. After passing through many troubles
for some period now Pepsi is a market leader in international arence and is

34
available in 187 Nations throughout the world in 18 flavors having its Head
Office in New York, United State. Pepsi has 13 bottlers with 26 plants in
India. Through this compared with 60 plants of Coke is quite less, yet the
market share of Pepsi has increased quite significantly.

PEPSI IN INDIA

This $3040 billon, New York (U.S.) based Pepsi Company, had to start
from scratch after entering the country in 1989. Deep blue Pepsi, is a broad
based food and beverage company, deriving more than 60% of it’s sales and
operating profits from it’s snack foods and restaurant business.

Pepsi started its commercial production in 1990 with plants, one at


Channo (Sangrur) and other at Jahura (Distt. Hoshiarpur). Pepsi drink, which
was introduced six year back, has now become the household name thought
the country.

The Marketing efforts of Pepsi in the first three year were so


successful, that Pepsi had taken major market share of Parle and Parle has to
face hard times. Pepsi-Cola has been positioned as a drink for the young. It’s
popular slogan “YEHI HAI RIGHT CHOICE BABY” go to show that appeal
is significantly for the younger generation in a popular, much aired
commercial, Bollywood star Sachin Tendulkar. Began to cdroon in the tune
only after he’d guzzled, the right cola, made the smart choice (A-Ha!).

Behind the hype in an effort invisible to consumer Pepsi pumped in Rs.


300 crore to add muscle to its infrastructure in bottling and distribution.

At present Pepsi is at war with Coke at National level.

CADBURY SCHWEPPES

Cadbury Schweppes are joined force of Cadbury found in 1824 of


U.K. and Schweppes of Ireland founded in 1783. Cadbury Schweppes is
unified bussing which manages the relations his with over 240 franchised

35
bottling operation on Zambia and Zimbabwe. Cadbury Schweppes has fottlery
and partnership operations in 14 countries around the world.

CADBURY SCHWEPPES IN INDIA

May 1995 one more soft drink Cadbury Schweppes entered the Indian
soft drink market and now the competition in this industry is more due to rise
in the number of competition and also due to large product range that they all
are offering to the market. Cadbury Schweppes, just about two year old in
India udebtufues with the guerilla. Number three in the aerated soft drink
market after Pepsi and Coca-Cola Company; it is resorting to some very smart
footwork to gain its share of silence.

The company wants to be number one in the non-cola aerated soft


drink market, to which end it has unabashed a series of tactics. “WE DON’T
DIRECTLY HIT COMPETITION BUT CHOP AT AWAY AT THE
ENGED”. Says Ashok Jain C.E.O Cadbury Schweppes India. The idea is to
convert the narrow scrip to a niche and build it to a position of reverence with
a consumer.

John S. Perberton, who in 1886 first construed coke syrup in his


laboratory, knows little that he had made a formula that would sell one day to
a thirsty market of 13.1 billion dollar coke drinkers.

Perberton was morphine addict who was trying to create marketable


patent medicine. When his experiments led to the new scared Coke formula.
He had only modest success selling Coke in Atlanta and he sold his formula
and right for a pittance. He died in 1888. Atlanta druggist as a Candler who
soon gained control of Coca-Cola is in many way the true father of coke. He
transformed the small time operations in to a nation wide soda fountain
sensation.

Early on, Coke had a distinct cocaine kick, even through corporate,
Coke has long dispute. This piece of America folk care, saying the coke leaf,

36
was they with the syrup and training needed to produce distributes and sell the
product and above all the most valuable assent, the trademark.

Also coca-cola’s main revenue stream is from the sale of concentrate


of its bottles. In India, the sole rights the manufacturer concentrate rests with
its 100% subsidiary coca-cola beverages near Pune.

A unit of concentrate makes 400 cases (of 24 bottles each) and


according to an estimate generates income of Rs. 20 per case for the parent
company.

Bottlers maintain their production line to coke standard of 600 bottles


per minute.

Today the two multinational operates in two ways.

COBO-Company owned bottling operation, and

FOBO-Franchisee owned bottling operation.

WHERE THE MONEY GOES

Low per capital consumption of soft drink in India may be linked to


the inflated prices of such drinks. But surprisingly it leaves a very low margin
for bottler’s decocanised. Candler had later testified on court that coke
contained a very small proportion of drug without the coke would never have
been as popular as it was its early days. The cocaine was eliminated in 1903,
as panicked reaction to the raising criticism, inflamed by Newspaper
allegations that black coke drinkers were attacking whites.

In 1917, Candler gave almost all of his coke, stock to his children, who
sold out two years later to a syndicate headed by, Atlanta Banker Ernest

37
Woodruff, for $25 million. Woodruff eventually took over and ruled the
company to its present glory. Woodruff died in 1985.

COKE IN INDIA

Despite the formidable track of its parent (Coca-Cola Company the


$18 billion gaint, based in Atlanta “U.S.”), Coca-Cola India’s record in
Rs.1800 crore soft drinks market is prominent. Coca-Cola entered Indian
market after 16 years from Hathras December 1993 Coca-Cola became the
undisputed leader of the Indian soft drink industry, because if their acquiring
rights of Ramesh Chauhan’s aerated Parle drinks.

With one stroke of the pen, and a bill of 140 crore coca-cola picked by
five brands- Thums Up, Limca, Gold Spot, Citra and Maaza with a combined
market share of 69 percent with Thums Up alone accounting for 56% of the
then 650 crore cola segment.

Coca-Cola world’s largest selling soft drink and which sells nearly half
the soft drink of world market its reentry with planned strategy.

MODUS OPERANDI

The multinational soft drink companies carry their business by


licensing bottlers around the country or more technically franchising the
bottlers and supplying also. With retail prices ranging to Rs.9-10 per bottle
(300ml) for consumer and Rs.196 per crate (24 bottles) for retailers. A bottler
must pay as such as 34% of the price per case as excise duty, sales and
turnover tax.

A further 10% goes into expenditure on local advertising and sales


promotion. Distribution and transportation cost takes care of another 10% Raw
material cost, Concentrate, Sugar, Citra, Acid, Bottle caps etc. eat up another
23% production cost, in terms of fuel, power, maintenance and labour add up
to 14%.

38
Thus leaving a bottler with a margin of 9%, again 4% of this would go
into warheads and interest charges, trimming down the margin to a simply 4-5
% a bottling operation, thus is viable only large volume.

(This is also one of the reasons of FOBO being converted in COBO).

The consumer, obviously, shoulders most of the burden, bottle cost are
also critical component of soft drink business.

Coke is positioning all of its beverages as all seasons’ beverages rather


than only summer drinks; this will greatly help to increase consumption.

In summer coca-cola was coping with a change, C.E.O-Alex Born has


replaced David Short.

Coke has made India its home; coke is experimenting with mobile
dispensing units at beaches and stadiums, going out towards consumers. “Our
goal is to have available within arm’s reach of desire”. Nicholas once said
(Retd. C.E.O).

While Pepsi wants people to come to them, Coke plans to after


consumer.

Coke’s objective in short run shall be converted Pepsi drinks, rather


than Thums Up drinkers to Coke.

39
THE COMPETITIVE AREA AMONG COKE AND PEPSI

The soft drink market all over the world as been witnessing a neck-to-
neck battle between the two major players; Coca-Cola and Pepsi since very
beginning. The thirst quenchers are trying hard to have the major piece of the
apple of overall carbonated soft drink market. Both the players are spending
their energies in building capacity, infrastructure, promotional activities etc.

40
Coca-Cola, being 11 years older than Pepsi, has been dominating the
scene in most of the soft drink market of the world and enjoying the leadership
terms of the market share. But the coca-cola people are finding it hard to deep
away Pepsi, which has been narrowing the gaps regularly; the two are posing
threats for each other in every nook and corner of the world. While coca-cola
has been earning most of the part of its bread and butler through beverages
sales, Pepsi has a multi products portfolio with a handsome portion from the
same business.

The two warriors are face to face once again here in India with
different strategies and policies to attack at rival Coca-Cola is focusing upon
the joint ventures with the existing bottlers to enhance its control on
manufacturing and marketing of its product range and attain the quality
standards of its class. Countering its Pepsi has taken the baton in its own hands
by floating and investment of $95 millions to set 6 Pepsin Co. India Holdings,
a subsidiary for company’s owned bottling operation (COBO).

Both of the companies are following different path of reach the same
destiny i.e. to fetch the bigger portion of aerated soft drink market in India

Both the competitors have distinct vision and priorities about the
Indian soft drink market. Through having so much difference and distances
with each other, they both consider India as a huge potential market as per
capita consumption here in more 3 servings per year against an international of
80. Throughout, they are putting their best efforts to woe Indian consumer
who has to work for 1.5 hours to by a bottle cross over for both the athletes
running for getting No.1 position.

Coca-Cola is well set with its 53 bottling sites throughout the country
giving it an edge over competition by possessing a well built manufacturing
and distribution set up on the other side of picture, Pepsi, with two more year
in India, has been able to set an image of winner this giants are ready to turn
every stone of opportunity with a mindset of long tenure this time.

41
Coca-Cola has been penetrating the market through its wide product
range with a determination to change competition pattern of soft drink in
India. Firstly, they upgraded the whole industry by introducing 300 ml bottles,
which in turn, had given the industry a booming growth of 20 % as compared
to earlier 5%. They want to develop a coca culture here and are working on a
strategy to offer soft drink in every possible package. In coca-cola camp, the
idea of competition has not come from Pepsi, but from the other beverages
such as tea, coffee, nibu pani, water etc.

Pepsi is quite aggressive in its approach to Indian consumer. They are


desperately working in the strategy to be winner side in the hot cola war
between tow big barons. According to Pepsi philosophy it’s the madness that
encourages executives to thin to conjure up those creative tactics to knock the
fizz out of their competition. Pepsi had pumped a large amount on the
visibility of its blue-red-and-white logo. They have been going with
aggressive marketing by putting Sachine Tendulkar and now Shahrukh Khan
in their advertisement to endorses their brand, the role models for its targeted
consumer the teenagers. They have increase the fizz in the market price by
introducing the dispensers called fountain Pepsi and been enjoying a lead over
its rival three.

Coca-Cola on the other hand, has been working on the saying ‘skew’
and stead with ‘race’, side by side retailing to the every move of its
competitor. They have produced the shield of Thums Up with a handsome
market share in India soft drink market. Countering Pepsi; international
commercial that used two chimpanzees to coke a snack at coke, Thums Up
came with the aid line, “Don’t be Bandar, taste the thunder” Also Thums Up
has been positioned now very near to that of young in age of Pepsi and giving
it tuff time.

Everything has been put on fire by these cool merchants. If Coke got
the status of the “Official drink of Wills World Cup”, Pepsi blushed as
“Nothing official about it”. As Thums Up projected as ‘Saare Jahan Se
Achchha’. Pepsi was passionate enough with ‘Freedom to be’. When Thums
Up came up with ‘Thunder Blast’, the other one offered, Pepsi ‘Stuff Card’. If

42
red color is meant for Coke, Pepsi has chosen to be Blue. In this way, Indian
consumer is getting more fizz and punch from the two big brothers and he has
to given not about the winner.

43
44
MARKETING DEPARTMENT

Marketing is getting right goods and services at right time and right
place to right people at right price with right communication.

The comprehensive marketing activity at Kanpur Marketing Services is


controlled by Mr. Deepak Rewari (G.M.). Today consumers have different
measurements to buy above which has a smaller self-life. The major market of
soft drink is under the grab of local distributions, which provides the innocent
consumer’s all the sort of connections.

In such scenario educating the consumer and winning confident with


quality product is an uphill task because traditions are different to break.
Marketing department looks, after from loading of bottles to suggestions,
problems faced by customers. They have about 1200 retail points for exclusive
distribution, 18 wagons run for playing the products to their points. Retailers
get their demands fixed on the telephone to the marketing department, which
is transformed into charts. There demands are aggregated and given to the
personnel or supervisors at clock these personnel are of production
department.

Right from the first year of the incorporation the company is running
in top profit. This is because of many reasons. One of them is being that there
is no other bottling plant nearby. Also the company gives good margins to the
retailer’s along with various lucrative from time to time.

45
46
SALES PROMOTION TECHNIQUES OF COMPANY

1. Good
Advertising.
2. Effectiv
e Incentive Policy.
3. Quality.
4. Wide &
Deep Distribution System.
5. Attracti
ve packaging.
6. Allottin
g SGA’S (Refrigerator, Chest cooler, Table Umbrella,
Chairs etc.) to retailers.
7. Decorat
ing Retailers shop by display board, dealer’s board etc.

CRITERIA FOR PROVIDING FREE CHILLING


EQUIPMENTS

 With
every 1-2 crates purchased daily or alternatively an
icebox is provided.
 For an
average consumption of 5-6 crates a visi-cooler of
4crates.
 For a
purchase of 7-8 crates daily visicooler 7 crates.

47
 If
purchase exceeds 8 crates, then 9 crates visicooler or
deep fridger is provided.

With every chilling equipment a steplizer is provided it may be of 1


KV or 5 KV.

S.G.A PROVIDING COMPANIES

 Whirlpool India Ltd.


 Godrej G.E. Appliances Ltd.
 Western Refrigeration Ltd.
 Rockwel Industries Ltd.

All these industries are enlisted and approved by Coca-Cola.

PROMOTION BY THE COMPANY

All advertisement expenditure is incurred by coca-cola India, but only


D.P. Board, wall painting, S.G.A.’s etc. Company spends on it around 8-9 %
total sales company invested 305 crore rupees in advertisement Budget.

 Radio.
 T.V.
 Hoardings.
 Road signs.
 Sticker.
 Neon light.
 Banners.
 Newspaper.
 Magazines.
 Exhibition.
 Posters.
 Sponsoring local events.

48
SOME OTHER TECHNIQUES FOR PROMOTION OF
COCA-COLA COMPANY

THESE ARE THE CANS WHICH LAUNCHED IN


BETWEEN OLYMPIC GAMES IN EVERY YEAR IN THE
PAST

Olympic Commemorative Cans

1928

1948

1964

49
1992

1996

50
51
ADVERTISING

Advertising is non-promotion of goods and services, by a sponsor (a


firm or person) who can be identified and who has paid for this
communication. This purpose of advertisement is to sell something a good
service, idea person or place, either now or later this goal, reached by setting
specific objective that can be expressed individual ads. Those are incorporated
into an advertising campaign recall again from the buying decision process
that buyers go through a series of stages from unawareness to target customers
to the next stage in the hierarchy say from awareness to interest.

Specific advertising objective will be dictated by the firm’s overall


marketing strategy. Typical objective are:

52
a. Support personal selling advertising may be used to
acquaint prospect with seller’s company and product, easing the way for the
sales force.
b. Improve dealer relations: wholesalers and retailer like to
see a manufacturer support its product.
c. Introduction new product: consumer needs to be
informed even about line extensions that make used of familiar brand name.

Bareilly beverage lays emphasis on advertising at the core centers.


They lay their banners and hoardings at the important places and see to it that
they do space on media.

The product like Thums Up, Fanta, Limca and Maaza belong to one

group i.e. coca-cola, advertise on nation side basis for its products, by hireling

time and space on media.

To promote the product and to create the awareness of the product

every year they are spending Rs.10/- per crate for the advertisement. They are

spending the amount for wall painting, dealer’s board, glow signs, hoardings,

banners, stickers, posters and buntings.

Advertisement plays an important role in the success of coca-cola

product since its first newspaper ad. In 1886 that red, coca-cola delicious

“Refreshing Exhilarating” Invigorating”. Advertisement is a key of

implementing a strategy over one hundred year old to trigger desire as offer

and in as many ways as possible.

ADVERTISEMENTS TARGETED BY COKE

To target various consumer segment of soft drink different add


featuring cricket star, cine star, pop star have been created.

53
1.Lisa Ray (famous model) in a very interesting add, which featuring
him bathing with sprite. Having a catching line “Sprite bujhaye only
pyass baki all bakwaas”.

2.Amir Khan & Ashwarya Rai (both cine stars), which targeted
younger generation. This add. Contained imagery of rugged and
romantic for 330 ml of coke. Theme “ Coca-Cola Ho Jay”.

3.Another cola drink from coke i.e. “Thums Up”.

4.Limca leaving its old image of “Lime-n-Limoni” drink is been


shown as in the add. Featuring Shaif Ali Khan. A drink that could just
change the mood at time of disappointment lines. “Gala Gaya Sookh
Limca Key Liye Ruk”.

5.Fanta add. Showing children having lines “Bold Ho Jayo”.

6.A family giving new look to Maaza “ Tazza Mango”.

7.Diet Coke the exiting add. on the pool with fall swing calling “Taste
The Power Of One Calorie”.

8.Amir Khan in the as on Mini Coke very interesting and Roman tic
add.

54
55
OBJECTIVES OF THE STUDY

 The R.E.D. survey was done to find out the present status of Thums

Up, Coca-Cola, Fanta, Limca & Maaza in the retail outlets.

 To find the receptivity of the brand among the retailers and consumers

particularly of eating & drinking, grocery store, and convenience shops.

 To study the distribution and marketing strategy of thums up, coca-

cola, fanta, limca, and maaza- the major competitor in this category.

 To find out available opportunities in the market by finding gaps in

competitor’s penetration.

 To collect data about the retailers that can be used for activating new

channels and merchandising opportunities.

 To find out ways to increase the sales of the new launches in different

channels.

56
Review of Literature :

K. T. Jagannathan Coca Cola India to expand.The Hindu.Tuesday,


Jun 03, 2003.

Having seen a `modest profit' for the first time since it set foot in India,
multinational Coca Cola has trained its eyes on beefing up the per capita consumption
of soft drink in the country even as it is readying for a horizontal expansion into rural
areas.

Disclosing this in an exclusive interview with The Hindu here today, Patrick T.
Siewert , Group President (East and South Asia), said, "We will continue to focus on
profitability because we have invested nearly a billion dollar in India since our entry".
It had not repatriated any money back thus far. Asserting that "we need to see a return
on those large investments," Mr. Siewert, nonetheless, said, "we are taking a long
term view of that".

While declining to divulge the `modest profit figure' of its Indian operation in 2002,
he admitted that at least one-third of the profit was contributed by the decision of the
parent to write off the accumulated loss of over Rs. 2,000 crores. "Nearly two-thirds
of the profit are brought about by operational improvements that are driven by right
cost, execution and strategy," he claimed.

Fielding a range of questions, Mr. Siewert said the strategy of providing affordable
quality soft drinks had worked for Coco Cola. The focus of the company would be on
"building per capita consumption by making the soft drink an everyday affordable
item for the millions of people in India," he said.

The President saw a huge opportunity in rural areas. He said "the horizontal
expansion is still available to us" even though "we often talked about rural
expansion".

57
Mr. Siewert asserted that the soft drink business, notwithstanding the negative
perception in the minds of some, had been driving the growth in the domestic market.
In this context, he pointed out that Coca Cola had been buying $300 million worth
raw materials from within the country. It had been the largest buyer of sugar in Tamil
Nadu and had been keeping the glass and crate industries ticking. It had also been
picking up close to 8 per cent of refrigerator capacity in the country. He reckoned that
every one direct job in the Coca Cola system had resulted in 30-40 odd related jobs
elsewhere.

Precisely because of the multiplier effect that the soft drink industry was capable of
generating, he wanted the States to set out the right investment climate. Mr. Siewert,
in fact, had a meeting with the Tamil Nadu Chief Minister this afternoon. So far, Coca
Cola had invested $10 million in India this year. About 45 per of it had flowed into
the South, he pointed out.

Asked if Coca Cola's thrust on horizontal expansion would see a market-specific


pricing of products, he said the current price — Rs. 5 for 200 ml, Rs. 8 for 300 ml, Rs.
38 for 1.5 litre and Rs. 43 for two litres — fitted well in rural markets as well. He said
`lower pricing' need not bring good for consumers all the time. In his reckoning, price
points should be supported by right cost positions and return on investment. Mr.
Siewert said all long term assets of the Indian subsidiaries were funded by equity and
the working capital needs by domestic debt. To a question, he said Coca Cola had
divested 49 per cent of the equity in favour of India investors. While declining to
divulge the name, he said at least 10 per cent had been picked up by employees,
suppliers and bottlers.

Mr. Siewert asserted that India and China were on top of Coca Cola's priority in its
global game plan. While the Chinese market was larger than India, the former was not
growing as fast as the latter.

Going forward, the company was proposing to open 1.50 lakh new outlets this year
and a similar number next year as part of its horizontal expansion strategy even as it
kept its eyes open for opportunities in new categories of beverages.

58
Global Competition Policy Magazine. A Hard Landing in the Soft
Drink Market - MOFCOM's Veto of the Coca-Cola & Huiyuan
Deal . April 2009

China’s Ministry of Commerce (MOFCOM) vetoed the proposed acquisition


by Coca-Cola of Huiyuan, a company with an important presence in the Chinese fruit
juice market. This is the first time that MOFCOM has prohibited a transaction under
the Anti-Monopoly Law (AML), in effect since August 2008.

MOFCOM gave three reasons for blocking the transaction. First, in its view, Coca-
Cola might be able to leverage its dominant position in the market for carbonated soft
drinks into the fruit juice market. Second, MOFCOM found that the addition of the
Huiyuan brand name to Coca-Cola’s own fruit juice brand could increase entry
barriers. Third, MOFCOM expressed concern that the transaction could negatively
affect the ability of domestic small- and medium-sized companies to compete.

This paper critically examines several interesting aspects of MOFCOM’s prohibition


decision. In particular, it discusses the insufficient degree of transparency which
characterizes MOFCOM’s merger control regime at present. Then, an attempt to
analyze MOFCOM’s substantive antitrust reasoning in the decision is made. Finally,
the paper focuses on the actual or potential influx of non-competition policy
objectives into MOFCOM’s assessment.

G.Chandrashekhar A multi-faceted FMCGs.Business Line. Monday,


May 03, 2010

Maize or corn is by far the largest cereal FMCG grown around the world. In the last
three years, global FMCG output averaged 800 million tonnes. The US is a dominant
producer and consumer.

Traditionally, it is used for humans and feed for livestock and poultry. Industrial uses
include making of starch. In recent years, with emergence of bio-fuels, corn is used
for production of ethanol for blending with gasoline. The new demand segment has

59
helped expand corn utilisation, but tightened availability of the cereal for the
traditional uses as food and feed.

India ranks among the top 10 of world's maize producers. Indeed, in our country,
maize is an exceptional success story among generally poorly performing cereals.
Acreage and output have been steadily rising. Currently, this coarse grain is cultivated
in about 8 million hectares and the yield is approximately 2.3 tonnes a hectare. Less
than a quarter of the planted area is irrigated.

Although the cereal is produced virtually across the country, Andhra Pradesh,
Karnataka and Rajasthan are among the top producing States. Cultivated mainly in the
kharif season, maize recorded output of 18.9 mt in 2007-08 and a record 19.7 mt in
2008-09. There is tremendous scope for raising yields through improved input
management and agronomic practices. The crop is susceptible to vagaries of
monsoon. No wonder, total production in 2000-10 declined to 17.3 mt following
inadequate precipitation last year.

In the US, introduction of genetically modified corn (Bt corn) has helped raise yields
and cut losses arising out of pest and disease attacks. India is an occasional exporter
of maize to the world market; but the volumes are modest. Rising domestic demand
from food, feed and industrial sectors has resulted in tightening availability and firm
prices. Going forward, a robust growth in the livestock and poultry industry is sure to
translate into higher demand for feed corn. Some reports project such requirement at
30 mt by 2020.

Obviously, to ensure future self-sufficiency, India needs to plan to raise production


through productivity increases. It calls for planning and investment. Higher
production must come not from horizontal expansion of acreage but from vertical
growth in yields. But, there are challenges. Land availability and water shortage are
likely to be constraining factors. Worse, it is said that Indian maize is at the limit of
heat tolerance. In the event, global warming and climate change can potentially affect
yields that are even otherwise low by world standards.

60
We need to start researching heat-tolerant and drought-tolerant varieties. The user
industry, mainly poultry and animal feed industry, can contribute to strengthening
maize production and productivity.

Maran invites Japanese textile cos to India.Business Line.Thursday,


Jul 23, 2009

To diversify textiles and clothing exports and to reduce dependence on the US and EU
27, the Government is promoting exports to South East Asia under its ‘Look East
Policy’.

The Minister of Textile, Mr Dayanidhi Maran, has invited the Japanese textiles
industry to collaborate with the Indian textiles industry in manufacturing of fabric and
garmenting, setting up of greenfield units in textiles machinery, manmade fibre and
yarn and create brand equity with Indian apparel companies.

He inaugurated the Indian pavilion at Japan’s premier International Fashion Fair


earlier.

Mr Maran was addressing the business meet hosted by the Japan-India Business
Cooperation Committee on ‘Current status of Growing Textiles Industry and
investment opportunities’ in Tokyo.

During the interaction with the top 50 Japanese businessmen, which included many
from the textiles industry, the Minister apprised them of various advantages in
investing in India, particularlyin the textiles sector, which has a highly skilled
workforce, high capital-employment ratio and immense potential to promote
employment, and a strong and diverse raw material base.

“India is the largest producer of jute, second largest producer of cotton and man-made
fibre and yarn, and third largest producer of silk. India has a vertical and horizontal

61
integrated textiles value chain, and represents a strong presence in the entire value
chain from raw material to finished goods. The average labour cost in India is $ 0.7 a
hour compared to $ 20 a hour in Japan,” he added.

Outlining the investment scenario in the Indian textiles sector, Mr Maran said that
investment is expected to increase from $ 22.3 billion in 2004-08 to $ 30.9 billion by
2010.

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63
R.E.D CONCEPT

ABOUT THE R.E.D SURVEY

 The survey named as R.E.D. (RIGHT EXECUTION


DAILY).
 The survey has been conducted to check the cooler
management, availability of products & activation of coca-cola in various
outlets.

The survey was based on three topics :-

 Firstly, I have to check the cooler management i.e.


the cooler that was provided by the company to the customer, are properly
managed/working or not. And lastly the most important aspect of cooler
management was the brand order.
 Secondly, I have to check the availability of the
product i.e. whether the product is available to the customer or not.
 Lastly, I have to check the activation, which is a
very important because activation helps to boost the sales. Activation is done
through boards i.e. glow sign. DPS, Flanges and Combo boards. Mostly
combo boards are given to the E&D outlets. And is very helpful in attracting
the customers. Rack with header is provided to the Grocery outlets, which
should be fully charged.

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MARKET SEGMENTATION

CHANNELS

Which type of outlet is this like E&D (Eating & Drinking), GROCERY, or
CONVENIENCE?

E&D : Like restaurant must have 5 tables with chairs.

GROCERY : Like general store.

CONVENIENCE : Like Pan Shop.

CLASSES

Which class outlet has like BRONZE, SILVER, GOLD, or DIAMOND?

BRONZE : Those outlets, which sells less than 200 carets per year.

SILVER : Those outlets, which sells 200-499 carets per year.

GOLD : Those outlets, which sells 500-799 carets per year.

DIAMOND : Those outlets, which sells 800 & above carets per year.

INCOME

Whoever costumer comes on shop which income class they belongs like high
Income, medium Income, low Income.

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R.E.D.

(RIGHT EXECUTION DAILY)

OUTLET WISE DISTRIBUTION OF R.E.D

CHANNEL CLASS LOCALITY


INCOME
GROUP

Convenience Diamond High

Ex –Pan shop, P.C.O etc. 800c/s sale

Grocery Gold Medium

Ex – General store, 500-799c/s sale


Provision store etc.

E&D (Eating and Drinking) Silver Low

Ex – Restaurant, Hotel etc.

PRE-SALE CONCEPT

This is the new concept that had started from the year 2007. In the Pre-
Sale the company takes order one day before and accordingly company
delivers their products for each route.

66
67
What is Horizontal Expansion?
Expansion of business capacity through the absorption of facilities or
buildings as well as through the acquisition of new equipment to handle an increased
volume in sales in which the business is already engaged. In microeconomics and
strategic management, the term Horizontal Expansion describes a type of ownership
and control. It is a strategy used by a business or corporation that seeks to sell a type
of product in numerous markets. Horizontal Expansion in marketing is much more
common than Vertical Expansion is in production. Horizontal Expansion occurs when
a firm is being taken over by, or merged with, another firm which is in the same
industry and in the same stage of production as the merged firm, e.g. Pepsi has
adopted strategy of Vertical Expansion by which Pepsi wants to improve it’s sale
from Coke monopoly outlets, means Coke’s monopoly outlets are being taken over by
Pepsi now in this condition to improve it’s sale Coke need to open new outlets which
is called Horizontal Expansion Strategy. A monopoly created through Horizontal
Expansion is called a Horizontal Monopoly.
This is the expansion of a firm within an industry in which it is already active
for the purpose of increasing its share of the market for a particular product or service.

Reason Of Horizontal Expansion?


The ultimate objective of coke is to acquire more customer and serve them
properly. While doing Horizontal Expansion take care to the competitor’s strategy.
The main competitor is PEPSI, who has opted Vertical Expansion to generate more
sell however Coke do not believe on Vertical Expansion because Vertical Expansion
has limited preview so COKE is great believer in Horizontal Expansion and this
strategy helped to the company to aintain its leadership in the soft drink industry.
India is a big country having diversified taste and appearance and same
character is reflected in their demography. Horizontal Expansion helps the company
to serve the more people and more customers touch point because in the waste
country many customers commutes.

68
Benefits of horizontal expansion:
• Provides Incremental Volume & Revenue for Business
• By horizontal expansion there will be more outlets of our product In the market
which will sell our product in more quantity. This will generate incremental revenue
for the business.
• Helps Improve Route Productivity
• There are pre determined routes through which product is transported and delivered
at the coke outlets. If we open more outlets on the routes it will increase the
productivity because more outlets will be covered and more product will be delivered
with a negligible increase in time and efforts. Hence it will improve productivity of
the route
• Improves Profitability of Our Distributors Expenses on routes and delivery of
product are incurred by the distributers. Opening new outlets will give more revenue
to our distributors also. With the increase in route productivity will improve
profitability of the distributors.
• Reduced Dependence on Large Customers, We know that coke products have a
very good demand. To comply with this we have to provide large amount of supply.
In case we have few outlets a large amount of stock is gathered at few retailers. In this
case they become monopolistic and demand many things like coolers refrigerators
discounts margins etc. from the company. So it is very necessary to reduce
dependence on large retailers by opening new outlets.

• Increase market visibility Selling at more outlets give more market visibility of the
product which gives higher product recognition and brand value to the products.
• Economies of scale
• Economies of scope
• Increase in market power over supplier and downstream market channels.

69
Advantage of horizontal expansion over vertical expansion:
Both expansion techniques are meant for increasing sales volumes. But in horizontal
expansion company can earn more profits by spending less. Let’s see the profit story
of horizontal expansion.

70
71
RESEARCH METHODOLOGY
This research involved a study, which was descriptive in nature it basically
aims at gathering data about how the coca-cola scheme playing in the mind of
shopkeepers & consumer.

METHODS OF DATA COLLECTION

THERE ARE TWO TYPES OF DATA


1. Primary data
2. Secondary data

1. Primary data collection : Primary data can be collected by three


methods;

a) Observation
b) Experiment
c) Surveys

But here, only surveys method of data collection is preferred which is very
suitable to reach the researcher motto.
A. Research instrument: Printed Questionnaire
was used as the research instrument to collect the required information.
B. Area of surveys : The survey was conducted in
different location of Kanpur city.

Sampling plan: sampling plan consists of

72
I. Sampling unit : The retailer of Grocery shop,
general store, betel shop, and medicine store was selected from
different places of kanpur
II. Sampling size : 250 Outlets.
III. Sampling procedure : Simple random sampling
procedure was followed.
IV. Sampling method: Data were collected by retailer
survey. The retailers are directly contacted and interviewed at their retail
counter.
2) Secondary data collection : As secondary data were not
available with shopkeepers as well as stockiest, so these were collected from
company records.

73
74
ANALYSIS OF DATA

DATA ARE COLLECTED FROM DIFFERENT LOCATION OF KANPUR


LIKE:
1. LALBANGLA
2. JAGAI PURWA
3. OM PURWA
4. SWAROOP NAGAR
5. JAJMAU
6. SHIVKATRA
7. HARZENDRANAGAR
8. K.D.A. COLONY
9. DEFENCE COLONY

SURVEY ANALYSIS
THE SURVEY WAS CONDUCTED IN DIFFERENT LOCATION
OF KANPUR.A TOTAL SURVEY OF 250 OUTLETS WAS CONDUCTED.

SIZE OF VISI-COOLER IN 250 OUTLETS

1%
8% 2% 7%

82%

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Here 82% Retailers are having 6 shelf Freezer,7% Retailers are having De-
Freezer, 8% Retailers are having 8 shelf Freezer, 1% Retailers are having 4 shelf
Freezer & 2% Retailers are having Double Door Freezer.

IS PRE-SELLING GOOD OR THERE IS SOME GAP AT


THE
DELIVERY TIME OF THE PRODUCTS?

200

150
100

50

0
1 2
Series1 200 50
1.GOOD
2.GAP

So 200 respondents say that Pre-Selling Concept of Coca-Cola is good while

50 respondents are saying that Pre-selling concept of Cocal is not goodbecause of

distribution system.

LEADING BRAND OF THE COCA-COLA COMPANY


ACCORDING TO THEIR PREFERENCES

76
8%
7%
THUMS UP
6%
COCA COLA
SPRITE

14% LIMCA

63% FANTA

2% MAZZA

So among all the products of coca-cola 63% market covered by Thumsup, 14%
market covered by Sprite, 8% market covered by Mazza, 7% market covered
by Coke, 6% market covered by Limca & 2% market covered by Fanta.

CHANNEL OF THE COCA-COLA COMPANY


CONSIDERING SURVEYED (250) OULETS.

70% 66%
60%
50%
40% 29%
30% Series1
20% 5%
10%
0%
GROCERY

CONV.
E&D

CHANNEL

OULETS BELONGS TO WHICH CLASS MADE BY THE


COMPANY?

77
19

92
DIAMOND
83
GOLD
SILVER
BRONZE

56

INCOME GROUP OF THE OUTLETS.

31% HIGH
MEADIUM
54%
LOW
15%

Here 54 % Market covered by high income groups which includes Diamong & Gold
Classes, 31% Market covered by Medium income groups which includes Silver Class
& 15% Market covered by low income groups which includes Bronze Class.

MARKET SHARE OF COCA-COLA COMPANY COMPARING


WITH PEPSI COMPANY

78
PEPSI
29%

PEPSI
COKE

COKE
71%

79
CONCLUSION

EVERY THING IN THIS WORLD IS MADE TO UTILIZE PROPERLY


BUT IT SHOULD BE REACH AT THE PROPER PERSON OR TO THE
PROPER UTILIZED AREAS. OTHERWISE THE VALUE ADDED TO
THOSE THINGS BECAME IN VEIN.

AS THERE IS A PROVERB THAT,

“FAR FROM EYE, FAR FROM HEART”

THUS MARKETING ROLE PLAYS A VERY IMPORTANT ROLE IN


ACHIEVING THE OBJECTIVES OF A COMPANY. UNDOUBTLY,
VALUE UTILITY IS CREATED BY THE MANUFACTURE OF
PRODUCT OR SERVICE BUT TIME AND PLACE UTILITIES ARE
CREATED BY MARKETING ROLE. ACCORDING TO DRUCKER,
“BOTH THE MARKET AND THE DISTRIBUTION CHANNELS ARE
OFTEN MORE CRUCIAL THAN THE PRODUCT”. THEY ARE
PRIMARY: THE PRODUCT IS SECONDRY. IN AN ECONOMY LIKE
THAT OF INDIA, WHERE MARGINAL SHORTAGES CAN LEAD TO
DISPROPORTATION DISTORTION IN PRICES, A DEPENDABLE AND
EFFICIENT DISTRIBUTION SYSTEM IS VERY MUCH ESSENTIAL.
THE DISTRIBUTION SYSTEM CREATES A VALUE ADDED TO ALL
MOST ALL PRODUCTS.

ALL FROM THE ABOVE STUDY NOT WITHSTANDING ITS


RESTRUCTING EFFORTS PEPSI IS STILL FAR AWAY WITH ITS
GREAT COMPETITOR LIKE COKE.

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FINDINGS

 THE MOST POPULAR FLAVOUR IN THE MARKET IS THUMS


UP.
 COCA-COLA IS MARKET LEADER AND PEPSI IS THE
MARKET CHALLENGER IN THE WHOLE MARKET WHERE I HAVE
SURVEYED.
 FROM THE COCA-COLA PRODUCTS THUMS UP AND THE
PEPSI PRODUCTS DEW IS THE HIGHEST SELLING IN THE MARKET.
 COCA-COLA IS THE MARKET LEADER IN OVERALL
MARKET.
 IN SOME AREAS LIKE LAL BANGLA THE SUPPLY OF PEPSI IS
BETTER THAN COCA-COLA.
 I HAVE FOUND THAT A RETAILER GIVES MORE PREFENCE
TO THE COCA-COLA PRODUCTS LIKE THUMS-UP, MAZAA, SPRITE,
AND FANTA.
 SALES HAVE INCREASED AFTER LOCATING VISI COOLER
OUTSIDE OF OUTLET.
 THE COMPANY NEW CONCEPT PRE-SALE GOT THE GOOD
RESPONSE MEANS THE CONCEPT OF PRE-SALE PREFERS BY THE
RETAILERS.
 THE STORES ARE CATEGORISED ON THE BASIS OF THEIR
SALE, IT MEANS DIAMOND, GOLD, SILVER, BRONZE..

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SUGGESTION

 THE COMPANY SHOULD WORK OUT IN THEIR COMPLAINES


REGARDING TO THE VISI COOLER AND STABLIZER.
 COMPANY SHOULD GIVE PROPER SCHEMES TO THE
OUTLET.
 THE REFRIGRATOR PURITY SHOULD HAVE THE PRIORITY.
 OVERALL SERVICES SHOULD BE IMPROVED FOR GETTING
MORE SALE AND TO BE THE MARKET LEADER.
 THE SALES EXECUTIVE SHOULD TRY TO AVOID MAKING
FALSE COMMITMENTS FOR RELISING SHORT TERM GOALS.
 NUMBER OF HOARDING SHOULD BE INCREASED.
 FLORESCENT BOARD DISPLAYING LOCATION AND THEIR
DISTANCES ON ROAD SHOULD BE USED HAVING COCA-COLA
WRITTEN ON THEM.

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Surveyors Name: ________________________ Outlet Name: ______________
Address: _________________________________________________________
Mob: ________________________Age____________ Sex ________________

1. Are you retailer of Coca-Cola?

Yes No

2. Under Which Channel does your shop comes under?

E&D Grocery Convenience

3. Is a Coca-Coca vesi cooler present in your shop?

Yes No

4. What is the size of your Vesi-cooler?

4-shelf 6-Shelf 8-Shelf Double Door De-Freezer

5. According to you, Company’s pre-selling Concept is-

Good Gap

6. According to you, Which flavor is the most preffered one among customers?

Thumsup Coke Sprite Limca Fanta


Maaza

7. Your outlet comes under which class?

83
Diamond Gold Silver Bronze

8. According to you, the income of your outlet is –

High Medium Low

9. According to you, which company’s products are having greater demand?

Coca-Cola Pepsi

REFRENCES

WEBLIOGRAPHY :

1. http://www.scanaxn.com/doc/11465324/BC-Cocacola-Summer-Training-
Full-Report
2. http://www.pdftop.com/ebook/bcg+matrix+of+coca+c
ola/
3. http://findarticles.com/p/articles/mi_m0EIN/is_2007_D
ec_10/ai_n21149578/
4. http://www.oppapers.com/subjects/horizontal-expansion-in-coca-cola-
page1.html
5. http://www.hinduonnet.com/2003/06/03/stories/200306
0301601800.htm
6. http://papers.ssrn.com/sol3/papers.cfm?
abstract_id=1396968

84
REFERENCE BOOKS

 Kotler Philip,”Marketing Management”.Dorling Kindersley (India) Pvt. Ltd


New Delhi,13th Edition,2009

 GUPTA S.P, “Statistical Methods” Sultan chand & sons Publishers New
Delhi, Thirty fourth editions, 2005

 KOTHARI.C.R, “Research methodology- Methods & Techniques” New Age


International (P) Ltd. New Delhi, Second edition,2004

RED SCORING SHEET

Surveyors Name: __________ Outlet Name:


______________ Address: _________________ Channel:
________________ Category (D/G/S): ________________ Class
(H/M/L): ___________________________

KANPUR S.NO. E&D GROCERY CONVENIENCE


1. Is a coca-cola cooler present?
Visicooler/chest cooler.
2. Is the cooler as per standard?

3. Is the vesi cooler in the prime position?

4. Is the visicooler in a working condition?


VISICOOLER Not working/unclean
5. Is the visicooler light working?

6. Is the cooler 100% pure?

7. Is the cooler brand-order compliant?

TOTAL
9. 300 ML (COLA+3)

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10. Mobile PET (COLA+3)

11. Maaza RGB

12. CAN (COLA+1)


AVAILABILITY
13. MAAZA PET 600ML & 1.2 LTR.

14. 1.5 LTR. PET (COLA+3)

TOTAL
E&D
15. COMBO BRANDS ( AT LEAST 3)

16. TENT CARD(MIN 5 OR PRESENT ON


ALL TABLES
17. FLANGE ROAD STANDEE OR GLOW

ACTIVATION SIGN BOARD


GROCERY
18. DISPLAY RACK WITH HEADER

19. IS THE RACK PURE AND CHARGED

20. SHELF DISPLAY


CONVENIENCE
21. TABLE TOP DISPLAY

22. DPS BOARD, GLOW SIGN OR


FLANGE
GRAND TOTAL

SIGNATURE OF SURVEYOR

86