PROJECT ON MAAZA FRESH

Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra)

EXECUTIVE SUMMARY “Market penetration” is one of the four growth strategies of the Product-Market Growth Matrix defined by Ansoff. Market penetration occurs when a company enters/penetrates a market with current products. The best way to achieve this is by gaining competitors' customers (part of their market share). Other ways include attracting non-users of your product or convincing current clients to use more of your product/service (by advertising etc). The project assigned to me is “Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra market)” and to make this project I have prepared a questionnaire to conduct a survey on outlets present in these markets. Each of these markets i.e. Salugara and Bagdogra are controlled by different MDs (Market Developer) who accompanied me throughout the project. For the initial days, I was required to fetch orders for Maaza Tetra Pak from the outlets which gave me valuable insights and understanding of the topic, since it also involved interaction with the retailers. The Siliguri market has three distributors for Hindustan Coca Cola Beverages Pvt Ltd and they are Aqua Sales, Gupta Enterprise and Roys Sales Agency. The project undertaken by me covers Salugara and Bagdogra markets and the distributors of these markets are Gupta Enterprise and Roy Sales Agency respectively. Since Salugara and Bagdogra are under the vicinity of different distributors, therefore, this project also provides the comparative study of these distributors based on Market Penetration of Maaza Tetra Pak.

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Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra)

CHAPTER- I

INTRODUCTION

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Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra)

SOFT DRINK INDUSTRY: OVERVIEW Three leading companies have prominent presence in the soft drink industry. The leaders include the Coca-Cola Company, PepsiCo, and Cadbury Schweppes. According to the Coca- Cola annul report; it has the most soft drink sales with $32 billion. The Coca-Cola product line has several popular soft drinks including Coca-Cola, Diet Coke, Fanta, Barq’s, Sprite, Maaza etc selling over 400 drink brands in about 200 nations. PepsiCo is the next top competitor with soft drink sales grossing $28 billion for the two beverage subsidiaries, PepsiCo Beverages North America and PepsiCo International. PepsiCo’s soft drink product line includes Pepsi, Mountain Dew, Miranda, Slice etc which make up more than one quarter of its sales. Cadbury Schweppes, the third major player had soft drink sales of $13 billion with a product line consisting of soft drinks such as A&W Root Beer, Canada Dry, and Dr. Pepper. These companies' products occupy large portions of any supermarket's shelf space, often covering more territory than real food categories like dairy products, meat, or produce. The prototype of all marketing and branding struggles, the "Cola Wars" keep expanding. The Pepsi and Coca Cola keep rolling out the big guns: dueling pop stars, and new branded products in the form of “Vanilla Coke" and “Pepsi Blue.” They are fighting on the TV, in the fast-food restaurants, and in the supermarkets; they are also dueling in the schools. One of the biggest pushes of the last few years has been convincing school districts, universities, and other institutions to go all-Coke or all-Pepsi, in return for a (small) cut of the gross sales. Selling costly sugared water and building an increasing demand for it, even in Third World countries, involves marketing in its purest form, unsullied by any pre-existing need or local tradition. Markets in Eastern Europe, China, India, and Mexico, among others, are expanding fast, and both Coke and Pepsi are finding local partners (bottlers) in these countries to keep extending their reach. And while the American market may be mature, there's still an opportunity worldwide to replace hot beverages like coffee and tea that require some preparation with these cold, iconic ready-to-drink brands. Bharati Vidyapeeth Institute of Management and Research, New Delhi 3

Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra)

KEY SUCCESS FACTORS Key factors for competitive success within the soft drink industry branch from the trends of the macro environment. Primarily, constant product innovation is imperative. A company must be able to recognize consumer wants and needs, while maintaining the ability to adjust with the changing market. They must keep up with the changing trends. Another key factor is the size of the organization, especially in terms of market share. Large distributors have the ability to negotiate with stadiums, universities and school systems, making them the exclusive supplier for a specified period of time. Additionally, they have the ability to commit to mass purchases that significantly lower their costs. They must implement effective distribution channels to remain competitive. Taste of the product is also a key factor for success. Furthermore, established brand loyalty is a large aspect of the soft drink industry. Many consumers of carbonated beverages are extremely dedicated to a particular product, and rarely purchase other varieties. This stresses the importance of developing and maintaining a superior brand image. Price, however, is also a key factor because consumers without a strong brand preference will select the product with the most competitive price. Finally, global expansion is a vital factor in the success of a company within the soft drink industry. The United States has reached relative market saturation, requiring movement into the global industry to maintain growth.

Variant Available

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Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra) Soft drinks are available in glass bottles, aluminum cans and PET bottles for home consumption. Fountains also dispense them in disposable containers. Nonalcoholic soft drinks beverage market can be divided into carbonated and non carbonated drinks. Cola, Lemon and Oranges are carbonated drinks while mango drinks come under non carbonated category. The market can also be segmented on the basis of types of products in the cola products and non-cola products. Cola products accounts for nearly 61-62% of the total soft drinks market. The brands that fall in this category are Pepsi, Coca-Cola, Thumps Up, Diet Coke, Diet Pepsi etc Non Cola segment which constitutes 36% can be divided into four categories based on the types of flavors available namely: Orange, Cloudy Lime, Clear Lime and Mango. . Robust time ahead for soft drinks Soft drinks are expected to see robust volume growth over the forecast period. This will occur despite a total volume and constant value decline for carbonates. Growth will be led by bottled water and, from a smaller base and with slower growth, fruit/vegetable juice. Health and convenience are predicted to be the two most important factors affecting buying behavior, as carbonates and concentrates play second fiddle to healthier bottled water and fruit/vegetable juice. Overall Carbonated Soft Drink In fact, Coke and Pepsi have a third major rival on the bottled soft drink shelves, namely

Cadbury-Schweppes. The big three carbonated beverage makers now

exist in a stable oligopoly those changes only by small increments and which controls over 90% of the market. Over the years, Cadbury-Schweppes (the result of a merger between a British candy company and a British beverage company) has improved its position by acquiring key brands in the US, namely Dr. Pepper and Seven Up, along with A & W and Canada Dry. In 2001, however, Cadbury acquired moribund RC Cola, giving it a cola drink to battle against the big guys. This gave the company more shelf position and immediately gave the RC Cola brand, long a distant also-ran with weak marketing muscles, more sales and market presence. Pepsi gave itself a small boost because of the popularity of newly introduced Mountain Dew Code Red, a hyper-caffeinated soda. Coke's numbers declined slightly. It's pretty indicative of this mature market that the only major Bharati Vidyapeeth Institute of Management and Research, New Delhi 5

Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra) move in market share comes through a takeover. Moreover, the takeover targets that are left are so small that the biggest remaining brand doesn't make more than 1% difference in total volume. Product coverage Asian speciality drinks; Bottled water; Carbonates; Concentrates; Fruit/vegetable juice; Functional drinks; RTD coffee; RTD tea

Market trends and industry challenges In order to survive in this environment, companies must consider the market trends that will likely shape the industry over the next few years. This will help soft drink companies to understand the challenges they will encounter and to turn them into opportunities for process improvement, enhanced flexibility and, ultimately, greater profitability. Market trends for the soft drink industry can be summarized by six fundamental themes:  Changing consumer beverage preferences, featuring a shift toward health-oriented wellness drinks.  Growing friction between bottlers and manufacturers in the distribution system.  Continually increasing retailer strength.  Fierce competition.  Complex distribution system composed of multiple sales channels.  Beverage safety concerns and more-stringent regulations.

Consumers turn to wellness and healthy drinks Bharati Vidyapeeth Institute of Management and Research, New Delhi 6

Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra)

In much of the developed world, a significant portion of the population is overweight or obese. This includes two-thirds of Americans and an increasing number of Europeans. Consequently, many people have started to actively manage their weight and change their lifestyles, a shift that is reflected in their choices in the beverage aisles: •

Demand has increased for beverages that are Perceived to be healthy

•

Energy drink consumption has also climbed, due to The increasingly active lifestyles of teenagers This trend towards healthier drinks has created a number of new categories, and

changed the consumption trends of the beverage industry as a whole. While previously dominated by carbonated soft drinks, the industry is now more evenly balanced between carbonates, and product categories with a healthier image, such as bottled water, energy drinks and juice: While carbonates are still the largest soft drink segment, bottled water is catching up fast, with an average of 58 litters consumed annually per capita. Among individual countries, Italy ranks number one in bottled water consumption, with the average Italian drinking177 litters per year. Overall, bottled water represents the fastest growing soft drink segment, expanding at 9percent annually. This growth is being partially driven by increasing awareness of the health benefits of proper hydration. The industry has responded to consumers’ desire for healthier beverages by creating new categories, such as energy drinks, and by diversifying within existing ones. For example, the leading carbonated soft drink companies have recently introduced products with 50%less sugar that fall mid-way between regular and diet classifications. Similarly, a South African juice company has recently released a fruit-based drink that contains a Full complement of vitamins and nutrients.

HISTORY: THE COCA- COLA COMPANY Bharati Vidyapeeth Institute of Management and Research, New Delhi 7

Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra)

The Early Days Coca-Cola was created in 1886 by John Pemberton, a pharmacist in Atlanta, Georgia, who sold the syrup mixed with fountain water as a potion for mental and physical disorders. The formula changed hands three more times before Asa D. Candler added carbonation and by 2003, Coca-Cola was the world’s largest manufacturer, marketer, and distributor of nonalcoholic beverage concentrates and syrups, with more than 400 widely recognized beverage brands in its portfolio. With the bubbles making the difference, Coca-Cola was registered as a trademark in 1887 and by 1895, was being sold in every state and territory in the United States. In 1899, it franchised its bottling operations in the U.S., growing quickly to reach 370 franchisees by 1910. Headquartered in Atlanta with divisions and local operations in over 200 countries worldwide, Coca-Cola generated more than 70% of its income outside the United States by 2003 International expansion Coke’s first international bottling plants opened in 1906 in Canada, Cuba, and Panama. By the end of the 1920’s Coca-Cola was bottled in twenty-seven countries throughout the world and available in fifty-one more. In spite of this reach, volume was low, quality inconsistent, and effective advertising a challenge with language, culture, and government regulation all serving as barriers. Former CEO Robert Woodruff’s insistence that Coca-Cola wouldn’t “suffer the stigma of being an intrusive American product,” and instead would use local bottles, caps, machinery, trucks, and personnel contributed to Coke’s challenges as well with a lack of standard processes and training degrading quality. Coca-Cola continued working for over 80 years on Woodruff’s goal: to make Coke available wherever and whenever consumers wanted it, “in arm’s reach of desire.” The Second World War proved to be the stimulus Coca-Cola needed to build effective capabilities around the world and achieve dominant global market share. Woodruff’s patriotic commitment “that every man in uniform gets a bottle of Coca-Cola for five cents, wherever he is and at whatever cost to our company”14 was more than just Bharati Vidyapeeth Institute of Management and Research, New Delhi 8

Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra) great public relations. As a result of Coke’s status as a military supplier, Coca-Cola was exempt from sugar rationing and also received government subsidies to build bottling plants around the world to serve WWII troops. Turn of the Century Growth Imperative The 1990’s brought a slowdown in sales growth for the Carbonated Soft Drink (CSD) industry in the United States, achieving only 0.2% growth by 2000 (just under 10 billion cases) in contrast to the 5-7% annual growth experienced during the 1980’s. While per capita consumption throughout the world was a fraction of the United States’, major beverage companies clearly had to look elsewhere for the growth their shareholders demanded. The looming opportunity for twenty-first century was in the world’s developing markets with their rapidly growing middle class populations. The World’s Most Powerful Brand Interbrand’s Global Brand Scorecard for 2003 ranked Coca-Cola the #1 Brand in the World and estimated its brand value at $70.45 billion. The ranking’s methodology determined a brand’s valuation on the basis of how much it was likely to earn in the future, distilling the percentage of revenues that could be credited to the brand, and assessing the brand’s strength to determine the risk of future earnings forecasts. Considerations included market leadership, stability, and global reach, incorporating its ability to cross both geographical and cultural borders. From the beginning, Coke understood the importance of branding and the creation of a distinct personality. Its catchy, well-liked slogans (“It’s the real thing” (1942, 1969), “Things go better with Coke” (1963), “Coke is it” (1982), “Can’t beat the Feeling” (1987), and a 1992 return to “Can’t beat the real thing”) linked that personality to the core values of each generation and established Coke as the authentic, relevant, and trusted refreshment of choice across the decades and around the globe.

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Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra)

THE COCA COLA SYSTEM We are a global business that operates on a local scale in every community where we do business. We create global reach with local focus because of the strength of the Coca-Cola system, which comprises our Company and our bottling partners—more than300 worldwide. Our Company manufactures and sells concentrates, beverage bases and syrups to bottling operations; owns the brands; and is responsible for consumer brand marketing initiatives. Our bottling partners manufacture, package, merchandise and distribute the finished branded beverages to our customers and vending partners, who then sell our products to consumers. All bottling partners work closely with customers—grocery stores, restaurants, street vendors, convenience stores, movie theatres and amusement parks, among many others—to execute localized strategies developed in partnership with our Company. Customers then sell our products to consumers at a rate of 1.6 billion servings a day. Our business operations are divided into the following geographies: Eurasia and Africa, Europe, Latin America, North America and Pacific as well as our Bottling Investments Group.

MISSION OF COCA-COLA Create consumer products services and communications customer’s service and bottling system strategy process and tools in order to create competitive advantage and deliver superior value to-Consumers as a superior beverage experience.  Consumers as an opportunity to grow profit through the use of finished drinks.  Bottlers as an opportunity to make reasonable to grow profits and value added  Suppliers as an opportunity to make reasonable when creating real value added in environment of system wide teamwork, flexible business system and continuous improvement.  Indian society in form of contribution to economic and social development. Bharati Vidyapeeth Institute of Management and Research, New Delhi 10

Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra)

VISION OF COCA-COLA VISION FOR SUSTAINABLE GROWTH  PROFIT: Maximizing return to shareowners while being mindful of our overall responsibilities.  PEOPLE: Being a great place to work where people are inspired to be the best they can be.  PORTFOLIO: Bringing to the world a portfolio of beverage brands that anticipate and satisfy peoples’ Desires and needs.  PARTNERS: Nurturing a winning network of partners and building mutual loyalty.  PLANET: Being a responsible global citizen that makes a difference.

VISION 2020

The world is changing all around us. To ensure our business will continue to thrive over the next 10 years and beyond, we are looking ahead to understand the trends and forces that will shape our industry in the future. Our 2020 Vision creates a long-term destination for our business. It provides us with business goals that outline what we need to accomplish with our global bottling partners in order to continue winning in the marketplace and achieving sustainable, quality growth. For each goal, we have a set of guiding principles and strategies for winning throughout the entire Coca-Cola system.

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Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra)

VALUE Coca-Cola is guided by shared values that both the employees as individuals and the Company will live by; the values being: •

LEADERSHIP: The courage to shape a better future

•

PASSION: Committed in heart and mind

•

INTEGRITY: Be real

•

ACCOUNTABILITY: If it is to be, it’s up to me

•

COLLABORATION: Leverage collective genius

•

INNOVATION: Seek, imagine, create, delight

•

QUALITY: What we do, we do well

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Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra)

Public (NYSE: KO) Dow Jones Industrial Average

Type

component Industry

Beverage

Founded

1892

Headquarters

Atlanta, Georgia, United States

Area served

Worldwide

Key people

Muhtar Kent (Chairman and CEO) Coca-Cola Carbonated Soft Drinks Water Other Non-alcoholic beverages

Products

Revenue

▲ US$31.0 Billion (FY 2009)

Operating income

▲ US$8.23 Billion (FY 2009)

Net income

▲ US$5.82 Billion (FY 2009)

Total assets

▲ US$48.7 Billion (FY 2009)

Total equity

▲ US$24.8 Billion (FY 2009)

Employees

92,400 (October 2009)

Website

KO.com or The Coca-Cola Company Corporate Website Source: www.wikipedia.com

HINDUSTAN COCA- COLA BEVERAGES PRIVATE LIMITED (HCCBPL) ABOUT THE COMPANY Bharati Vidyapeeth Institute of Management and Research, New Delhi 13

Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra) India is home to one of the most ancient cultures in the world dating back over 5000 years. At the beginning of the twenty-first century, twenty-six different languages were spoken across India, 30% of the population knew English, and greater than 40% were illiterate. At this time, the nation was in the midst of great transition and the dichotomy between the old India and the new was stark. Remnants of the caste system existed alongside the world’s top engineering schools and growing metropolises as the historically agricultural economy shifted into the services sector. In the process, India had created the world’s largest middle class, second only to China. A British colony since 1769 when the East India Company gained control of all European trade in the nation, India gained its independence in 1947 under Mahatma Gandhi and his principles of non-violence and self-reliance. In the decades that followed, self-reliance was taken to the extreme as many Indians believed that economic independence was necessary to be truly independent. As a result, the economy was increasingly regulated and many sectors were restricted to the public sector. This movement reached its peak in 1977 when the Bhartiya Janta Party government came to power and Coca-Cola was thrown out of the country. In 1991, the first generation of economic reforms was introduced and liberalization began.

COKE IN INDIA Coca-Cola was the leading soft drink brand in India until 1977 when it left rather than reveals its formula to the government and reduces its equity stake as required under the Foreign Exchange Regulation Act (FERA) which governed the operations of foreign companies in India. After a 16-year absence, Coca-Cola returned to India in 1993, cementing its presence with a deal that gave Coca-Cola ownership of the nation's top soft-drink brands and bottling network. Coke’s acquisition of local popular Indian brands including Thums Up (the most trusted brand in India), Limca, Maaza, Citra and Gold Spot provided not only physical manufacturing, bottling, and distribution assets but also strong consumer preference. This combination of local and global brands enabled Coca-

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Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra) Cola to exploit the benefits of global branding and global trends in tastes while also tapping into traditional domestic markets. Leading Indian brands joined the Company's international family of brands, including Coca-Cola, diet Coke, Sprite and Fanta, plus the Schweppes product range. In 2000, the company launched the Kinley water brand and in 2001, Shock energy drink and the powdered concentrate Sunfill hit the market. From 1993 to 2003, Coca-Cola invested more than US$1 billion in India, making it one of the country’s top international investors. By 2003, Coca-Cola India had won the prestigious Woodruff Cup from among 22 divisions of the Company based on three broad parameters of volume, profitability, and quality. Coca-Cola India achieved 39% volume growth in 2002 while the industry grew 23% nationally and the Company reached breakeven profitability in the region for the first time. Encouraged by its 2002 performance, Coca-Cola India announced plans to double its capacity at an investment of $125 million (Rs. 750 crore) between September 2002 and March 2003. Coca-Cola India produced its beverages with 7,000 local employees at its twentyseven wholly-owned bottling operations supplemented by seventeen franchisee-owned bottling operations and a network of twenty-nine contract-packers to manufacture a range of products for the company. The complete manufacturing process had a documented quality control and assurance program including over 400 tests performed throughout the process. The complexity of the consumer soft drink market demanded a distribution process to support 700,000 retail outlets serviced by a fleet that includes 10-ton trucks, open-bay three wheelers, and trademarked tricycles and pushcarts that were used to navigate the narrow alleyways of the cities. In addition to its own employees, Coke indirectly created employment for another 125,000 Indians through its procurement, supply, and distribution networks. Sanjiv Gupta, President and CEO of Coca-Cola India, joined Coke in 1997 as Vice President, Marketing and was instrumental to the company’s Bharati Vidyapeeth Institute of Management and Research, New Delhi 15

Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra) success in developing a brand relevant to the Indian consumer and in tapping India’s vast rural market potential. Following his marketing responsibilities, Gupta served as Head of Operations for Company-owned bottling operations and then as Deputy President. Seen as the driving force behind recent successful forays into packaged drinking water, powdered drinks, and ready-to-serve tea and coffee, Gupta and his marketing prowess were critical to the continued growth of the Company. MARKETING COLA IN INDIA The post-liberalization period in India saw the comeback of cola but Pepsi had already beaten Coca-Cola to the punch, creatively entering the market in the 1980’s in advance of liberalization by way of a joint venture. As early as 1985, Pepsi tried to gain entry into India and finally succeeded with the Pepsi Foods Limited Project in 1988, as a JV of PepsiCo, Punjab government-owned Punjab Agro Industrial Corporation (PAIC), and Voltas India Limited. Pepsi was marketed and sold as Lehar Pepsi until 1991 when the use of foreign brands was allowed under the new economic policy and Pepsi ultimately bought out its partners, becoming a fully-owned subsidiary and ending the JV relationship in 1994. While the joint venture was only marginally successful in its own right, it allowed Pepsi to gain precious early experience with the Indian market and also served as an introduction of the Pepsi brand to the Indian consumer such that it was well-poised to reap the benefits when liberalization came. Though Coke benefited from Pepsi creating demand and developing the market, Pepsi’s head-start gave Coke a disadvantage in the mind of the consumer. Pepsi’s appeal focused on youth and when Coke entered India in 1993 and approached the market selling an American way of life, it failed to resonate as expected.

Brand Localization Strategy: The Two India India A: “Life ho to aisi” Bharati Vidyapeeth Institute of Management and Research, New Delhi 16

Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra) “India A,” the designation Coca-Cola gave to the market segment including metropolitan areas and large towns, represented 4% of the country’s population. This segment sought social bonding as a need and responded to inspirational messages, celebrating the benefits of their increasing social and economic freedoms. “Life ho to aisi,” (life as it should be) was the successful and relevant tagline found in Coca-Cola’s advertising to this audience. India B: “Thanda Matlab Coca-Cola” Coca-Cola India believed that the first brand to offer communication targeted to the smaller towns would own the rural market and went after that objective with a comprehensive strategy. “India B” included small towns and rural areas, comprising the other 96% of the nation’s population. This segment’s primary need was out-of-home thirst-quenching and the soft drink category was undifferentiated in the minds of rural consumers. Additionally, with an average Coke costing Rs. 10 and an average day’s wages around Rs. 100, Coke was perceived as a luxury that few could afford. In an effort to make the price point of Coke within reach of this high-potential market, Coca-Cola launched the Accessibility Campaign, introducing a new 200ml bottle, smaller than the traditional 300ml bottle found in urban markets, and concurrently cutting the price in half, to Rs. 5. This pricing strategy closed the gap between Coke and basic refreshments like lemonade and tea, making soft drinks truly accessible for the first time. At the same time, Coke invested in distribution infrastructure to effectively serve a disbursed population and doubled the number of retail outlets in rural areas from 80,000 in 2001 to 160,000 in 2003, increasing market penetration from 13 to 25%. Coke’s advertising and promotion strategy pulled the marketing plan together using local language and idiomatic expressions. “Thanda,” meaning cool/cold is also generic for cold beverages and gave “Thanda Matlab Coca-Cola” delicious multiple meanings. Literally translated to “Coke means refreshment,” the phrase directly addressed both the primary need of this segment for cold refreshment while at the same time positioning Coke as a “Thanda” or generic cold beverage just like tea, lassi, or lemonade. As a result of the

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Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra) Thanda campaign, Coca-Cola won Advertiser of the Year and Campaign of the Year in 2003. RURAL SUCCESS Comprising 74% of the country's population, 41% of its middle class, and 58% of its disposable income, the rural market was an attractive target and it delivered results. Coke experienced 37% growth in 2003 in this segment versus the 24% growth seen in urban areas. Driven by the launch of the new Rs. 5 product, per capita consumption doubled between 2001-2003. This market accounted for 80% of India’s new Coke drinkers, 30% of 2002 volume, and was expected to account for 50% of the company’s sales in 2003.

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Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra)

HINDUSTAN COCA- COLA BEVERAGES PRIVATE LIMITED (HCCBPL) STRUCTURE Coca-cola is a world class company in "low margin, high volume" business which means sales of high volume for the product in order to be profitable and complete in the global market. •

Company Owned Bottling Operation (COBO)

•

Franchisee Owned Bottling Operation (FOBO)

COBO : COBO stand for company owned bottling operations; COBO has been of Coke Company's biggest strategy, which has proved to be winner. A bottling operation is a capital intensive business, particularly so the returnable bottle market like in India and the investment is the forth level. Apart from the capital cost of plant and equipment the bottles has to invest in bottles and crates, truck and cooling structure (Visi Coolers and ice boxes) at the retail point industry estimates @ Rs. Crate which is equivalent to the price at which the crate enters the distribution system Bottlers operates on margins around 10% with the bulk of the killing (between Rs. 24 and Rs. 30 per crate or about 20%) being made by the retailer. Excise and other taxes amounting Rs. 40 per crate. The going for a COBO is the risk of coke Company and it is also implied a big attitude change from a totally marketing orientation to an operation mindset.

COBO'S IN INDIA COBO’s are present across the nation, the locations are given below: •

Mumbai, Bangalore, Ahemadabad, Chennai, Calcutta & Jalpaiguri unit also

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Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra)

FOBO FOBO stand for franchise owned bottling operation, in India Pepsi has franchise. In the case the company supplies its soft drink concentrate to its franchises (bottle syrup). Coca-cola has taken a more capital - intensive route of the owning and running its own plants along side those of its franchises. Coca-cola pumped in money to upgrade plants of franchises, which were weaker did not have financial worth were given massive support in form of interest free loans to upgrade their operations. Getting into FOBO has helped Coke Company on several fronts. First, it has enabled Pepsi to focus on marketing operations as much as it has on operation fronts. Another gain of going FOBO is that since the franchises have to invest in plants and machines glass bottles, trucks, and infrastructure, the cost burden has been reduced. FOBO IN INDIA: FOBO are located at the following places: Part of Delhi, Punjab, Part of Andhra Pradesh, Calcutta and South Bengal

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Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra)

ORGANISATIONAL CHART

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Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra)

ORGANISATIONAL STRUCTURE

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Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra)

SALES DEPARTMENT STRUCTURE

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Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra)

CHALLENGES FOR COCA COLA The Coca-Cola Company and its products have been criticized by various sources for various reasons including negative health effects resulting from consumption of its products, exploitative labor practices, high levels of pesticides in its products, building plants in Nazi Germany which employed slave labor, environmental destruction, monopolistic business practices, hiring paramilitary units to murder trade union leaders, and marketing unhealthy products to children.

Health effects Acidity and tooth decay Numerous court cases have been filed against the Coca-Cola Company since the 1940s alleging that the acidity of the drink is dangerous and it causes tooth decay. High fructose corn syrup High fructose corn syrup was rapidly introduced in many processed foods and soda drinks in the US over the period of about 1975–1985. Since 1985 in the U.S., Coke has been made with high fructose corn syrup instead of sucrose to reduce costs. One of the reasons this has come under criticism is because the corn used to produce corn syrup often comes from genetically altered plants. Some nutritionists also caution against consumption of high fructose corn syrup because of possible links to obesity and diabetes. High fructose corn syrup has been shown to be metabolized differently than sugar by the human body. India secret formula ban 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.

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Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra)

Environmental issues In India, there exists widespread concern over how Coca-Cola is produced. In particular, it is feared that the water used to produce Coke may contain unhealthy levels of pesticides and other harmful chemicals. It has also been alleged that due to the amount of water required to produce Coca-Cola, aquifers are drying up and forcing farmers to relocate. Pesticide use In 2003, the Centre for Science and Environment (CSE), a non-governmental organization 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. 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. Coca-Cola's operations in India have come under intense scrutiny as many communities are experiencing severe water shortages as well as contaminated groundwater and soil that some assert are a result of Coca-Cola's bottling operations. A massive movement has emerged across India to hold the Coca-Cola Company accountable for its actions. The state of Kerala imposed a ban of colas from the state only to be quashed by Coca Cola; the matter is pending in the Supreme Court. The Plachimada plant in Kerala state, one of Coca-Cola's largest bottling facilities in India, has remained shut for 17 months now because the village council has refused to renew its license, blaming the company for causing water shortages and pollution.

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Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra) In Sivaganga District of Tamil Nadu state there were several protests and rallies opposing the proposed Coca Cola bottling plant in fear of water depletion and contamination. The president of the Gangaikondan panchayat, Mr. V. Kamson died under mysterious circumstances two days after going back and forth in his resentment against the upcoming Coca-cola bottling plant in the village. When asked about the conflicting statements, he said: "I am under immense pressure from the public, police and other quarters. So I have issued this statement." Five other Indian states have announced partial bans on the drinks in schools, colleges and hospitals. 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.

Economic business practices Monopolistic In 2000, a United States federal judge dismissed an antitrust lawsuit filed by PepsiCo Inc. accusing Coca-Cola Co. of monopolizing the market for fountain-dispensed soft drinks in the United States. In June 2005, Coca-Cola in Europe formally agreed to end deals with shops and bars to stock its drinks exclusively after a European Union investigation found its business methods stifled competition. In November 2005, Coca-Cola's Mexican unit - Coca-Cola Export Corporation and a number of its distributors and bottlers were fined $68 million for unfair commercial practices. Coca-Cola is appealing the case. Marketing In 1993, US investigative journalist Mark Pendergrast published For God Country and Coca Cola (ISBN 0465054684), an in-depth study of the marketing phenomenon which had made Coca-Cola synonymous with US culture. Bharati Vidyapeeth Institute of Management and Research, New Delhi 26

Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra)

In 2004, the British government launched a wide-ranging review into food promotion and childhood obesity. One survey found that Coca-Cola broadcasted a high proportion of their advertisements during children's television. The company removed its branding from vending machines in Scottish schools in December 2003, replacing it with a graphic of an urban scene. "Channel stuffing" settlement Coca-Cola Co, on July 7, 2008 compromised to pay $137.5 million (69.4 million pounds) to settle an October 2000 shareholder lawsuit. Coca-Cola was charged in a U.S. District Court for the Northern District of Georgia, with "forcing some bottlers to purchase hundreds of millions of dollars of unnecessary beverage concentrate to make its sales seem higher." Institutional investors, led by Carpenters Health & Welfare Fund of Philadelphia & Vicinity, accused Coca-cola of "channel stuffing," or artificial inflation of Coca-Cola's results which gave investors a false picture of the company's health. The settlement applies to Coca-Cola common stock owners from Oct 21, 1999 to March 6, 2000.

Employee issues Racial discrimination In November 2000, Coca-Cola agreed to pay $192.5 million to settle a class action racial discrimination lawsuit and promised to change the way it manages, promotes and treats minority employees in the US. In 2003, protesters at Coca-Cola's annual meeting claimed that black people remained underrepresented in top management at the company, were paid less than white employees and fired more often. In 2004, Luke Visconti, a co-founder of Diversity Inc., which rates companies on their diversity efforts, said: "Because of the settlement decree, Coca-Cola was forced to put in management practices that have put the company in the top 10 for diversity."

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Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra)

Shareholder resolution attempt (2002) In 2002, Christian Brothers Investment Services, Inc. submitted, along with other co-filers, a shareholder resolution that called for Coca-Cola to adopt a code of conduct on bottling practices and employee relations. Problems in Colombia were cited, but the proposal called for "clear standards for its suppliers, vendors and bottlers." The resolution received support from Coca-Cola unions in Colombia, Guatemala, Zimbabwe, the Philippines, and the United States. However, Coca Cola's board of directors recommended rejecting the proposal, noting in the proxy: "We believe that the Company's existing policies address substantially all of the concerns raised in this proposal and that the proposal is therefore unnecessary... For example, both our policy and the Principles specifically provide that we (i) will not condone the exploitation of children, physical punishment or involuntary servitude; and (ii) will pay wages that enable our employees to meet their basic needs. Ultimately, shareholders rejected the resolution.

2010 Polish election campaign During Polish presidential election campaign 2010 two DJs of Radio "Eska Rock", Wojewodzki and Figurski, recorded a hip-hop song parodying the political usage of funerals of victims of 2010 Polish Air Force Tu-154 crash. The song's most attacked verse referred to burying the dead president among Polish kings at the Wawel castle hill. The authors also parodied the "I love Poland"-style of nationalistic politicians. Refrain criticized the dog-eat-dog approach of political usage of mourning and country-wide grief. The song quickly spread over social networks, by-passing mainstream media controlled by nationalist politicians that use censorship against their opponents CocaCola responded to the appeals of Polish nationalist activists and announced that its logo will be removed from "Eska Rock" Internet appearance.

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Market Penetration of Maaza Tetra Pak (Salugara and Bagdogra)

CLASSIFICATION OF OUTLETS AND BRAND ORDER SYSTEM Classification of outlets on the basis of volume There are four types of outlets according to the volume of sales of the outlet-Diamond

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800>C/s & above per year

Gold

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500-799C/s per year

Silver

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200-499C/s per year

Bronze

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