Sales and distribution

management and
forecasting @ Coca-Cola
 Introduction
ü Coca-Cola, the product that has given the
world its best-known taste was developed
in Atlanta, Georgia, on May 8, 1886 by
John.S.Pemberton

John.S.Pemberton

ü The bottler model which was a critical factor

in the Coca -Cola Growth Story was
developed by Asa Candler
ü
ü
ü
• AsaCandler

11/29/09 2
 Cont…..
§ Coca-Cola is the world’s No.1 soft drink brand. Four of the top five
Brands are owned by Coca-Cola Company and it sells more than
1 billion drinks a day
§ Coca-Cola Company is the world’s leading manufacturer, marketer
and distributor of non alcoholic beverage concentrates and
syrups, used to produce nearly 400 beverage brands and it
employs more than 90,000 people all over world.
§ Coca-Cola is a leading player in the Indian beverage market with a
60 per cent share in the carbonated soft drinks segment, 36 per
cent share in fruit drinks segment and 33 per cent share in the
packaged water segment.
§

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 COCA-COLA IN INDIA
§ Coca-Cola was the leading soft drink brand in India until
1977, when it left rather than reveal its formula to the
Government and reduce its equity stake as required under
the Foreign Regulation Act (FERA) which governed the
operations of foreign companies in India.
§
§ In the new liberalized and deregulated environment in 1993,
Coca-Cola made its re-entry into India through its 100%
owned subsidiary, HCCBPL, the Indian bottling arm of the
Coca-Cola Company.

11/29/09 4
 Cont….
• At Present there are 3 COBO Regions and 27 COBO Units
under HCCBPL and 1 FOBO Region and 12 FOBO Units
under CCI
•

}COBO Territories –
Coca cola owned
bottling operations

FOBO Territories -
Franchisee owned
bottling operations

11/29/09 5
Sparkling Beverages

Juices

Water and Soda

 Market Share
Figures in %age Figures in %age

11/29/09 7
Source-HCCBPL monthly circular –AC NIELSON
 Market Size
• Currently offers nearly
400 brands in over
200 countries or
territories and serves
1.5 billion servings
each day
• At present Coca-Cola
revenue is about $ 31
billion.
• At present, Indian food
S o u rce : and beverages
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Competitors in the industry
• PepsiCo:
– The company's soft
drinks include Pepsi,
Mountain Dew, and
Slice. Cola is not the
company's only
beverage; PepsiCo
sells Tropicana orange
juice brands, Gatorade
sports drink, and
Aquafinawater.
PepsiCo also sells Dole
juices and Lipton
ready-to-drink tea.
PepsiCo and Coca-Cola
hold together, a
market share of 95%
out of which 60.8% is
held by Coca-Cola and
• Nestlé:
– Nestle does not give that
tough competition to
Coca-Cola as it mainly
deals with milk products,
Baby foods and
Chocolates.
– But the iced tea that is
Nestea which has been
introduced into the market
by Nestle provides a
considerable amount of
competition to the
products of the Company.
Iced tea is one of the
closest substitutes to the
Colas as it is a thirst
quencher and it is
healthier when compared
to fizz drinks.
• PARLE:
– Parle gives competition to
Coca-Cola in fruit drink
segment and also mineral
water. Its products like
fruity, Appy and mineral
water like Bailey are
becoming substitutes to
coke products



• Other Players:
Cavincare’s “Maa”,
products like Badam
milk, fruit juice from
local players’ are giving
competition in non
carbonated segment
.Mineral water from
various companies like
Manikchand and various
other players are giving
competition in mineral
water segment to Kinley.
 Distribution system in Coca-Cola
Distribution Routes
1)Key Accounts-Clubs, fine dine restaurants, hotels, Corporate

houses
2)Future Consumption- Super markets and Departmental stores

3)Immediate Consumption- convenience stores like pan shops

Distribution System

 1)Direct distribution

 2)Indirect distribution

Distribution chain at HCCBPL


Production  Plant Warehouse  Depot Warehouse Retail Stock
 Retail Shelf  Consumer


1)
11/29/09 13
 Forecasting
• Techniques
• Done by whom?
• Sales budgeting
• sales territories planning
• Allocation of sales personnel
• Training the sales force
•
•
 Forecasting
• Report to vice president-Marketing
• City wise sales forecasting-sales
manager
•
 Forecasting factors
• Basis of forecasting- Historical data-
10 % increase in demand than
previous years sales
• GDP growth
• Seasonal variation
• Review done each week about sales
turnover
 SKU- Pack wise sales
forecasting
• Coca-Cola, Thums Up, Fanta ,Limca and Sprite: 330 ml can,
200 ml and 300 ml Returnable glass bottles; 500+100 ml
free, 1.5 liter and 2 liter PET bottles
• Diet Coke: 330 ml can and 500 ml PET bottle
• Maaza: 200 ml and 250 ml Returnable Glass Bottle;
500+100 ml free and 1litre+200 ml free PET bottles and
the newly introduced 200 ml Tetra Pack
• Minute Maid Pulpy Orange: 400 ml and 1 liter PET bottles
• Schweppes Soda Water: 300 ml returnable glass bottles,
500+100 ml
• Free PET bottles
• Schweppes Mineral Water: 750 ml PET bottles
• Schweppes Tonic Water: 330 ml can
• Kinley Soda Water: 300 ml returnable glass bottles,
500+100 ml free and 1.5 liter PET bottles.
 Sales forecasting basis
• Manufacturing capacity of the
particular plant
• Rolling estimate
 Sales force motivation
• Incentives- based on quarterly
performance
• No of units & total revenue
generated works as base for
incentives calculation
• Every executive needs to add 1000
outlets every year to get UNIT
incentives
• Target achievers get- Fridge, T.V.,
Certificates, Lunch with vice-
§
q RED-Right Execution Daily is Coca-Cola’s sales execution
strategy Redscore Calculation-
q
q FMCG products like soft drinks have Quick turnover and low
cost. It is vital for Coca cola to monitor both the
internal and external aspects regarding its business as
this is important to maintain and improve its profits,
market share, and sales.
q
q Coca-Cola is an impulse product and it needs Merchandising to
drive sales and profit. Merchandising is the systematic
process of effectively displaying consumer products at the
point of purchase.
q
q This objective is achieved by implementing sales execution
strategy known as RED-“Right Execution Daily” which
measures Availability, Activation and Cooler standards of
outlets where Coca-Cola is sold.
q
q 11/29/09 20
ü
 Cont…
q By this it is able to connect with consumers, retailers and able to
achieve progress in terms of 4A’s-Activation, Availability,
Acceptability, Affordability.
q RED’s progress is measured by PITA-Profit Creation Model by
which gross profit can measured.
q This survey is done by AC NIELSON every month to check
Availability ,Activation and Visi-cooler standards for RED
outlets. RED outlets are which show consistency in sales over
a period.
q Each RED outlet is scored for 100 marks out of which 50 marks
are for Availability 30 for Visi-cooler 20 for Activation for a
particular outlet
q

11/29/09 21
 Cont…..
qPresale 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.
ü Total no of RED outlets in India-288266
ü In Central India-89610
ü In North India-81989
ü In South India-116667
ü In Andhrapradesh-75158
ü Number of RED outlets in Visakhapatnam unit-9451 (This
covers Visakhapatnam, Vijayanagaram, Srikakulam)
ü

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 Territory planning Base
• Geographical connectedness
• Market potential
• Seasonal volume/Per Executive
•
 Sales force training
• Induction program for 1 day
• On the job training about basic
selling skills